With the novel coronavirus outbreak sweeping across the West since March, Hong Kong has seen a
second wave of the epidemic. There are now more than 1,000 confirmed cases, after imported infections surged dramatically in March. To contain the virus, the Hong Kong government has imposed measures.
Besides giving
quarantine orders to almost all arrivals, the government has also
banned public gatherings of more than four people, and temporarily closed fitness centres,
bars and other entertainment venues. Even the businesses that are still open – for example, restaurants – have been impacted because they are operating at limited capacity. Some establishments have
closed down. Social distancing is an effective measure, but at a huge economic cost.
Hong Kong’s economy has already been
going downhill since last year, from the double impact of the anti-extradition bill protests and the trade war between the United States and China. Across the world now, most economies are reeling from the coronavirus fallout. Internationally, the impact of Covid-19 has definitely surpassed that of the severe acute respiratory syndrome outbreak in 2003.
Delivering his budget in February, Hong Kong’s Financial Secretary Paul Chan Mo-po unveiled a
relief package of HK$120 billion (US$15 billion) to support local businesses facing hardship. The package includes a cash handout of HK$10,000 for every adult resident; however, this is less than enough and has
yet to be paid out.
As much economic activity has been put on hold, many employees are either being
let go or taking big pay cuts. Hong Kong has had no choice but to follow in the footsteps of many countries passing coronavirus relief packages. Last week, the government announced another relief package, this time of
HK$137.5 billion.
Under most circumstances, relief packages are exercises in good intentions. However, Chief Executive Carrie Lam Cheng Yuet-ngor seems to have another agenda. Study the details of the relief measures, and Lam’s
political purpose becomes obvious. Her intention is not to help the little people, but to use public money to the benefit of the pro-establishment camp, with an eye on the upcoming Legislative Council election.
First, the
HK$80 billion employment support scheme does not help the unemployed. Under the scheme, the government will provide employers with 50 per cent wage subsidies for six months, capped at HK$9,000 per employee per month. The government has urged employers to retain staff. However, there are
no strict rules and business owners could still fire anyone at any time.
Furthermore, the people who became unemployed before the announcement of the latest relief package will
receive no subsidy. Many of them, especially those in the “sandwich class”, are also ineligible to apply for the existing Comprehensive Social Security Assistance. So they are getting nothing.
Also, the employment support scheme does not set a salary ceiling, meaning that subsidies are also going to the people who are earning millions every year. A better solution would be to allocate the monthly HK$9,000 to employees who are on median incomes or lower, have taken pay cuts or been
told to take no-pay leave.
Moreover, to fully utilise the HK$80 billion, only small and medium-sized enterprises should be subsidised. Already, major employers such as the Hong Kong Jockey Club and HSBC have decided to opt out of the scheme. Hopefully, more listed companies and multinationals will do the same. The remaining money should be used to support the unemployed.
However, Lam’s policies tend to be business-friendly, for good reason. Under the employment support scheme, sizeable companies with hundreds of outlets and thousands of employees are going to receive tens or even hundreds of millions from the government. Is Lam out to please the eight functional constituencies dominated by the pro-establishment camp, including catering, tourism, insurance, and wholesale and retail? The incumbent lawmakers in these constituencies are very unpopular and in danger of losing their seats in the upcoming election.
If the government is serious about alleviating the health and economic crisis, it should be allocating more funding to medical workers: a professional registration fee
waiver is laughable, especially when compared to how Singapore is giving a bonus to frontline health workers and a grant to clinics designated for the coronavirus response.
Unfortunately, Hong Kong has fallen into the hands of a chief executive who apparently is not above using public funds for her own political benefit.
Albert Cheng King-hon is a political commentator
