You'll soon be getting a welcome HK$6,000 in your pocket. That's the sum Financial Secretary John Tsang Chun-wah is giving to six million Hong Kong residents in a budget rethink that sent him from zero to hero in a matter of days.

And that's on top of a tax rebate of up to HK$6,000.

The handout will go to all permanent residents aged 18 and over. Non-residents and those not covered could get help through Mandatory Provident Fund injections or a special fund, the statistics of which have yet to be worked out.

Exactly one week after announcing a budget that pleased no one, and an MPF injection that received the thumbs down, Tsang made a huge U-turn after a meeting with pro-government legislators on Monday.

The change of heart sent ripples of excitement through the community with several sectors already planning what to do with the windfall.

"In light of the public's views on the MPF injection, I have decided not to use the Mandatory Provident Fund as a platform," Tsang said yesterday after a second meeting with the pro-establishment camp.

The about-face will cost the government HK$41 billion - HK$37 billion for cash handouts and HK$4 billion for a 75 per cent tax rebate, capped at HK$6,000. The previous MPF proposal was slated to cost HK$24 billion. The government is working out when and how to distribute the cash. It is understood that mailing checks to residents, as was done in Macau, has been ruled out.

Under the new platform, people can choose to either draw out the full HK$6,000 or save it, with incentives to encourage them to save.

"I believe the scheme can cover most people in Hong Kong, including civil servants, housewives and retirees," Tsang said, adding the tax reduction is in response to calls from the middle class.

Tsang said he made the changes after listening to many voices and because it is important to reach a consensus with lawmakers.

A source said the government will use a lenient approach on how to define "permanent resident."

Lawmaker Ip Kwok-him of the Democratic Alliance for the Betterment and Progress of Hong Kong described the revised proposal as fair.

"Now there is something Hong Kong can be proud of," lawmaker Wong Kwok-hing of the Hong Kong Federation of Trade Unions added.

Raymond Wong Yuk-man of People Power said the cash handout is a victory for the people and he accepted it.

"John Tsang bowed to political reality and the handout will not affect public finance or inflation," Wong said.

Other pan-democrats said Tsang was only acting to cover his inadequacies.

They said Sunday's protest march against the budget will continue.

"Besides, there is no overall strategy. Just a mess. It is worse than not giving any money," said Civic Party lawmaker Audrey Eu Yuet-mee.

The Democratic Party's Albert Ho Chun-yan said the unusual, if not unprecedented, move is a result of strong public reaction.

"Tsang's integrity went bankrupt and shows this is a lame-duck government," Ho said.

Unionist Lee Cheuk-yan added: "After you swallow this sweet, can you get a flat? Or solve the widening wealth gap or education? No!"

However, City University political scientist James Sung Lap-kung said the turnout at Sunday's protest will be adversely affected.

"Hong Kong people are pragmatic and forgiving if they become beneficiaries," he said.

The lesson should teach the government to carefully consider policies in future.