Hong Kong shop, hotel and restaurant owners urged the government to cut fees and delay tax collections to help them weather a sales slump caused by a killer disease that's keeping residents at home and tourists away.
Store managers say sales have dropped by more than half since the mid-March outbreak of severe acute respiratory syndrome, or SARS, that has infected 970 people and killed 27. At restaurants and luxury hotels, patronage and occupancy rates have dropped as low as 10 percent, company officials say.
"We are going through a crisis that we have never been through before," said Yu Pang Chun, chairman of the Hong Kong Retail Management Association, which represents businesses employing two-thirds of the industry's workforce. "The government has to come out and help."
The appeals for assistance come as the government is trying to lift revenue to cut a budget deficit it forecast would reach a record HK$70 billion (US$9 billion) in the year ended March 31. Last month, Financial Secretary Antony Leung raised taxes for the first time in 11 years, adding to other budget-trimming measures such as cuts in civil-service jobs and pay.
Yu said the increase in corporate profits tax, which Leung raised to 17.5 percent from 16 percent with effect from April 1, should be delayed by six months. His association has also called on Leung to suspend sewage fees and other charges.
The Hong Kong Restaurant and Eating-House Merchants General Association and the Hong Kong Hotels Association said they too are asking the government for relief.
"The government should use every possible measure to get us through this very difficult time," said James Lu, executive director of the Hotels Association, which is urging the government to lead talks with utility companies on tariff cuts.
Law Wai Hung, secretary of the restaurant association, backed that call, saying utility and sewage fees account for 15 percent of restaurants' daily costs.
Yu also called on the government's Housing Authority, which owns more than a 10th of the city's leased retail space, to cut shop rents for three months. "They should take the lead to do something," said Yu, who called on Wharf (Holdings) Ltd. and other private landlords to follow suit.
A coalition of seven political parties said the government should consider waiving HK$2.2 billion of fees for public services to help restore consumer confidence.
Chief Executive Tung Chee-hwa said on April 8 the government is considering measures to help four industries -- tourism, retailing, restaurants and entertainment.
"It's a balancing act," said Mike Moran, an economist with Standard Chartered Bank. "They will be keen to offer some relief measures, which will dissipate some pressure from businesses. At the same time, they will be very careful not to be excessive in proposals, which may significantly worsen the budget."
Hong Kong will cut an earlier forecast for 3 percent economic growth this year, Leung said.
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