Hong Kong fourth wave: government reverses course and unveils another round of aid worth HK$6.4 billion for hard-hit businesses

After warning no further financial help was coming, administration says HK$5.5 billion will be allotted to restaurants, bars and beauty parlours, among others

The rest will be set aside for emergency use, but some sector representatives warn even with the handouts they will struggle to pay employee salaries

4-MIN READ4-MIN

Tables are left empty under social-distancing measures in Causeway Bay. Photo: Martin Chan

Published: 6:11pm, 17 Dec 2020Updated: 9:10am, 18 Dec 2020

Businesses struggling to remain afloat during the fourth wave of the coronavirus hammering Hong Kong will receive HK$6.4 billion in a new round of relief after the government reversed its position that the city’s strained finances could not afford any further handouts.

The subsidy programme, equal to US$826 million, will mainly help companies operating in the entertainment, catering, education and beauty and massage sectors, after tighter social-distancing rules kept customers away and sharply eroded their bottom lines.

Some operators expressed satisfaction with the latest scheme, but others warned the amount was still not enough to ensure their survival if the spread of the pandemic continued unchecked.

The government gave HK$310 billion (US$40 billion) in aid during three previous rounds and warned no more financial help was coming. But in revealing the package on Thursday, Chief Secretary Matthew Cheung Kin-chung said the policy U-turn was needed given the worsening health crisis.

“Some businesses have been hard hit,” he said. “We need to offer them assistance.”

Under the latest package, HK$5.5 billion will be distributed through 19 subsidy schemes with the remaining HK$900 million set aside for emergency use. The spending would push financial reserves down to HK$800 billion, equivalent to 12 to 13 months of government spending, and the deficit would balloon to a record HK$300 billion, Cheung said.