- For some it may be too little, too late but at least the government now is willing to share the pain that this unprecedented lockdown has brought to businesses and workers
The need for financial subsidies had become ever more evident as Hong Kong extended a sweeping lockdown to curb the spread of Covid-19 infections.
The HK$137.5 billion (US$17.74 billion) rescue package announced on Wednesday is the biggest move yet by the government to support the floundering economy. But for many who have already been hardest hit by the pandemic, the relief may be too little, too late.
Describing the impact as "disastrous", Chief Executive Carrie Lam Cheng Yuet-ngor said such an unprecedented challenge called for extraordinary measures.
The lion's share of the second round of support goes toward subsidising up to HK$9,000 in wages for each worker affected by the lockdown to help prevent mass lay-offs. Industries that were omitted in the first round of relief measures will also be covered. Together with the support in the first package and the budget, the total cost has reached HK$287.5 billion, or 10 per cent of Hong Kong's GDP.
With Singapore, Britain and Australia having adopted similar measures, the latest step, along with a 10 per cent pay cut for the ministerial team for a year, is overdue. But the direct subsidy is a remarkable shift from the targeted approach of the past. It is also the most encompassing yet in terms of scope and spending.
This would not be possible without the robust fiscal reserves accumulated over the years. Even though it is going to push the budget deficit to a record high of more than HK$276 billion, the reserves will still sit comfortably at HK$900 billion after the spending.
The lukewarm response underlines the depth of the discontent in society. Many businesses and workers have been left struggling on their own for months. The wage subsidies will take weeks to reach the affected businesses and account for a fraction of the operating costs. Many also find the details and eligibility clauses confusing.
Separately, the extended restrictions on social distancing, including another U-turn to ban beauty and massage parlours for 14 days, have understandably fuelled concerns.
The two industries were initially spared despite a small number of infections linked to a beauty centre. But they are nonetheless required to shut down as part of an extended ban until at least April 23.
Thankfully, the number of new daily infections have somewhat eased. But the threat is far from over. With double-digit rises every day, it is not the time to lower our guard. The thousands of warnings for breaches of compliance show the rules on social distancing are still not being fully observed.
With more financial support and stronger antivirus measures, the city has a greater chance of rebounding from this unprecedented health crisis.
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