The cash-strapped film industry yesterday appealed to the government to haul it out of its tailspin by underwriting bank loans for film production. Leaders warned that continued government inaction could hasten the demise of one of Hong Kong's oldest industries. However, one financial analyst cast doubt on the effectiveness of the proposal, saying the film industry was not the only sector in need of assistance. The idea was put forward at a forum to discuss revitalising the industry. Ng See-yuen, president of the Federation of Hong Kong Film Workers, said it could act as an incentive to banks approached for loans to small and medium-sized film productions. Box office takings have plummeted since 1997 from an annual $1.15 billion to less than $900 million in 2000. Mr Ng said the downturn over the past two years as well as rampant piracy in Asia continued to scare off investors and diminish cinema receipts. Lack of finance was now threatening to extinguish the industry altogether, with 5,000 workers facing imminent redundancy, Mr Ng said. He said it needed government assistance to survive what he described as a 'a very critical time'. On Monday, SAR cinemas saw their lowest daily box office takings of just $510,000. Reacting to worries that taxpayers' money would be used unfairly to subsidise the private sector, Mr Ng argued the film industry played a vital role in the SAR's cultural development. 'We understand the concern taxpayers' money should be properly used. But the film industry is an important sector for Hong Kong. Unless we were desperate, we would not stretch our hands out and ask for government help.' He cited the Oscar-winning Crouching Tiger, Hidden Dragon as an example of how Hong Kong talents were forced to look overseas for funding. The film starred Hong Kong's Chow Yun-fat and also Michelle Yeoh and most of the production team were Hong Kong residents. After attending yesterday's forum, deputy secretary for Information Technology and Broadcasting Alan Siu Yu-bun confirmed the bureau was studying the federation's proposal. He said that part of the Film Development Fund, announced by Chief Executive Tung Chee-hwa in 1999 to help boost the industry locally, could be used to underwrite loans. There is about $60 million left in fund. An associate director of Credit Lyonnais Securities Asia, Dominic Chan Chi-ming, said that a level of government underwriting was essential to lure banks to offer film loans. But he expressed doubt about the feasibility of the scheme as it would be difficult for the government to decide whether the film sector should be subsidised when there were other sectors of the economy in need of help. He added that government underwriting aside, banks would also have to be careful about possible losses in the face of rampant piracy and the relatively low quality of Hong Kong films.