Hong Kong Chief Executive Carrie Lam (林鄭月娥) yesterday announced a fresh government stimulus package of about HK$137.5 billion (US$17.7 billion) to support the territory’s deteriorating economy amid the COVID-19 outbreak.
The spending package is to include a HK$80 billion job security program to subsidize 50 percent of wages for workers in affected industries for six months, Lam said in a news conference yesterday evening following a meeting of her Executive Council, which approved the measures.
The government would also suggest that transit operator MTR Corp (香港鐵路), starting in July, cut fares by 20 percent for six months, Lam said.
Photo: Reuters
“We have to try our best to prevent the closure of businesses or large-scale job cuts,” she said.
“As we are facing an unprecedented challenge, the government has to respond in an unprecedented manner — to help businesses to survive, safeguard employment, and minimize the burden on businesses and citizens,” she added.
The Hong Kong government had been under pressure to add more support for an economy that had already slid into recession following months of political unrest and now faces shutdowns to curb the virus outbreak.
In February, the government announced a HK$30 billion anti-epidemic fund and a HK$120 billion relief package in the annual budget centered on a HK$10,000 handout to all permanent residents age 18 and above.
NEW MEASURES
Other measures announced yesterday include: Job security payments capped at HK$9,000 per individual for six months, with payments expected to be made no later than June. About 1.5 million residents are expected to benefit.
Thirty-thousand jobs are to be created, including civil service positions and internships, while registration fees for medical workers are to be waived and tenants of government properties would have their rents reduced by 75 percent.
Lam and 16 Cabinet ministers have also agreed to cut their salaries by 10 percent for one year.
That means Lam’s monthly salary will fall to HK$390,000 after controversially rising to HK$434,000 in July last year.
The additional spending announced yesterday almost doubles the projected budget deficit for the 2020-2021 fiscal year to HK$276.6 billion from an earlier estimate of HK$139.1 billion, which would account for about 9.5 percent of GDP, Lam said.
The relief deal is equivalent to 4.6 percent of the territory’s GDP, she said.
RESERVES TO DROP
Government reserves are also expected to drop to as low as HK$800 billion as a result of the relief measures, Hong Kong Financial Secretary Paul Chan (陳茂波) said at the news conference.
Hong Kong has fared better than many other regions in controlling the disease, with confirmed cases at about 935 yesterday.
Yet a second wave of registered infections brought by residents returning from overseas has caused alarm and spurred discussion of tighter restrictions, including closing all non-essential businesses.
Additional reporting by staff writer
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