Opinion | Finally officials have woken up to the need for wage subsidies

For some it may be too little, too late but at least the government now is willing to share the pain that this unprecedented lockdown has brought to businesses and workers

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Chief Executive Carrie Lam Cheng Yuet-ngor, meets the press at the Central Government Offices in Tamar. Photo: May Tse

Published: 9:56pm, 8 Apr 2020Updated: 11:31pm, 8 Apr 2020

The need for financial subsidies had become ever more evident as Hong Kong extended a sweeping lockdown to curb the spread of Covid-19 infections.

The HK$137.5 billion (US$17.74 billion) rescue package announced on Wednesday is the biggest move yet by the government to support the floundering economy. But for many who have already been hardest hit by the pandemic, the relief may be too little, too late.

Describing the impact as “disastrous”, Chief Executive Carrie Lam Cheng Yuet-ngor said such an unprecedented challenge called for extraordinary measures.

The lion’s share of the second round of support goes toward subsidising up to HK$9,000 in wages for each worker affected by the lockdown to help prevent mass lay-offs. Industries that were omitted in the first round of relief measures will also be covered. Together with the support in the first package and the budget, the total cost has reached HK$287.5 billion, or 10 per cent of Hong Kong’s GDP.

With Singapore, Britain and Australia having adopted similar measures, the latest step, along with a 10 per cent pay cut for the ministerial team for a year, is overdue. But the direct subsidy is a remarkable shift from the targeted approach of the past. It is also the most encompassing yet in terms of scope and spending.