The Hong Kong government has announced a new HK$80 billion subsidy package to help employers retain and pay staff members. The scheme is part of a HK$137.5 billion relief fund to aid citizens and business as the city’s economy is hit by the coronavirus outbreak.
Chief Executive Carrie Lam said at a press conference on Wednesday that economic activity in Hong Kong has been widely affected by the pandemic, with some industries such as tourism and aviation facing a “complete halt.”
Lam said the implementation of social distancing measures has also led to economic damage across different sectors. With the current unemployment rate standing at 3.7 per cent, she warned the figures would continue to surge.
To prevent large-scale layoffs, the government will fund eligible employers to pay 50 per cent of their employee’s wage, capped at HK$9,000 per month for a period of six months. In return, employers have to pledge not to fire their staff. Audits will take place after the funds are distributed in order to ensure employers use the cash appropriately.
The subsidy will be distributed in two instalments, with the first one handed out no later than June. It is estimated that around 1.5 million workers will benefit. A one-off grant will be given to around 215,000 self-employed persons who make MPF contributions.
Hong Kong recorded 25 additional cases of Covid-19 on Wednesday. The patients were aged from two months old to 71 years old. Fifteen of them had recent travel history and four were students. The total number of infections in the city has now climbed to 960.
Raft of measures
The government will also relax the financial requirements for Comprehensive Social Security Assistance applications for six months in order to support the unemployed.
The government will inject another HK$6 billion over the coming two years to create around 30,000 short-term jobs in the public and private sectors.
“Because we are facing unprecedented challenges, the HKSAR Government also has to make a unprecedented response,” Lam said.
The new round of relief measures also included a 20 per cent MTR fare cut for six months starting from July 1st.
Financial assistance will be offered to various industries including tutorial centres, cinemas, travel agencies, hotels, and eateries.
Lam estimated that the whole coronavirus relief package will cost around HK$138 billion. She said she, and other principal officials, will take a 10 per cent pay cut in the coming 12 months.
The move came a day after Lam came under fire for receiving an annual pay raise of HK$120,000 as listed in the budget for year 2020-21. The budget is still under review by the Legislative Council Finance Committee.