The next phase of Hong Kong’s coronavirus relief package is expected to involve less than HK$30 billion (US$3.9 billion) aimed at businesses most battered by the pandemic, leaving out sectors deemed to be less affected, such as retail and property management, the Post has learned.
A source familiar with the government’s position said officials had adopted a more cautious approach in drawing up plans for a third round of anti-epidemic funding given the city’s dire budgetary position.
“The third round of relief measures may be worth less than HK$30 billion,” the source said. “Its size will be smaller than the HK$30 billion for the first phase and the HK$137.5 billion for the second round.”
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The city’s top officials had earlier warned Hong Kong would record the highest deficit in its history this financial year and needed to reserve cash to cope with a possible winter resurgence of Covid-19 and the ongoing fallout from tensions between China and the United States.
Sectors less affected by the Covid-19 outbreak, such as retail and property management, may not be covered by the third round of the relief package, according to the source.
“Hard-hit sectors like catering, karaoke, tourism and transport will be given handouts,” the source said.
Chief Secretary Matthew Cheung Kin-chung took to his blog on Sunday to say the administration was preparing to roll out another round of relief measures – albeit in a financially prudent manner – to help firms and individuals affected by the pandemic.
The first cash injection into the Anti-epidemic Fund, HK$30 billion, was approved in late February.
In April, the government rolled out a much larger HK$137.5 billion coronavirus relief package, which included a HK$80 billion wage subsidy scheme intended to keep about 1.5 million workers employed during the crisis.
The stimulus package also offered one-off handouts for the hardest-hit sectors, including tourism, restaurants and entertainment.
Hong Kong to record highest deficit in history as top officials argue city must ‘reserve financial strength’
Financial Secretary Paul Chan Mo-po on Sunday said the two rounds of relief measures from the Anti-epidemic Fund had already swelled this year’s budget deficit to nearly HK$290 billion, or 10 per cent of the city’s gross domestic product.
Hong Kong’s cash reserves of HK$800 billion – down from HK$1.1 trillion in March – were equivalent to about 13 months of government spending, he said, the same level as after the city was hit by the severe acute respiratory syndrome (Sars) outbreak in 2003.
The government plans to formally lodge its request for more relief funding at a Legco finance committee meeting later this month.
Tourism industry lawmaker Yiu Si-wing said he expected the size of the next phase of the coronavirus relief package to be smaller than the first two, given the government’s massive fiscal deficit.
But he expressed hope the government would provide travel agency staff a subsidy equivalent to HK$5,000 a month each over the next half year.
“The tourism sector is the hardest hit amid the pandemic. Most travel agents have had nearly zero income since January,” Yiu said.
Tommy Cheung Yu-yan, the lawmaker representing the catering sector, said the government should offer subsidies to bars, karaoke lounges and nightclubs, currently closed due to social-distancing measures.
“I also hope the government will waive property rates [a charge levied on rental income] for premises for restaurants and retail outlets for six months,” he added.
Danny Lau Tat-pong, honorary chairman of the Hong Kong Small and Medium Enterprises Association, agreed the third round of the relief package should grant subsidies in a more focused manner.
“The government should concentrate its resources to help hard-hit sectors like bars, karaoke lounges, private tutors and sports coaches,” he said.
But Peter Shiu Ka-fai, a lawmaker representing the wholesale and retail sector, said that apart from supermarkets, most retail businesses had fared poorly over the past eight months.
“I hope the government will pay two months’ rent for retail outlets whose revenue is 30 per cent lower than last year,” he said.
More from South China Morning Post:
- Hong Kong to record highest deficit in history as top officials argue city must ‘reserve financial strength’ to cope with storms ahead
- Just six Covid-19 cases in first batch of 128,000 Hongkongers tested in mass screening scheme – including four recovered patients
- Hong Kong businesses complain government approach to relaxing social-distancing rules too cautious, inconsistent
- Coronavirus: Hong Kong retail sales drop 23.1 per cent but supermarkets buck trend again
- Hong Kong extends payment holidays until April 2021 to give struggling small businesses a lifeline out of worst recession