With the fifth wave of the pandemic now running rampant in Hong Kong, businesses and people from all walks of life are being affected. In particular, the retail market is frozen once again, which has dealt a heavy blow to the city’s economic recovery. In view of this, the Chamber has cut its economic forecast for Hong Kong to 1.2%. Fitch Ratings has similarly slashed its 2022 growth forecast to 1.5% from 3%.
In response to the deteriorating environment, the Government must make every effort to stabilize the economy with a view to “supporting businesses and saving jobs.”
In this regard, an injection of $27 billion into the Anti-Epidemic Fund (AEF) was approved at a Special Meeting of LegCo’s Finance Committee on 15 February, involving a series of direct support measures to help businesses and individuals affected by the pandemic.
Relief measures under the latest round of AEF include a one-off Temporary Unemployment Relief payment of $10,000 for people who have lost their jobs since the fifth wave of the pandemic, and a monthly allowance of $2,000 for five months for frontline cleaning and security staff.
I welcome this wide variety of measures proposed by the Government to save our economy: many of them are along the lines of my recommendations on “safeguarding jobs” in early February.
Meanwhile, cash flow is of critical importance for medium, small and micro enterprises to survive. As such, I am pleased to see in the latest Budget an extension of the Pre-approved Principal Payment Holiday Scheme to end October and an enhancement of the Special 100% Loan Guarantee for Enterprises by extending the application period to June 2023 and raising the loan ceiling to $9 million. These will allow more time and room for businesses to ride out the pandemic.
The fifth wave is expected to continue to rage in Hong Kong for some time. Therefore, I urge the Government to consider the following appeals: firstly, if the number of confirmed cases remains high, the Government should think out of the box and seriously consider launching an enhanced version of the Employment Support Scheme. This would help stabilize our economy and prevent a surge in unemployment, which could in turn undermine social harmony and stability.
Secondly – given that businesses have been suffering an ever-increasing operating burden due to anti-virus measures – the Government should take the views of local businesses into account, and think twice before rolling out any new policies that may affect the flexibility of our operating environment.
Thirdly, with the implementation of the vaccine pass, the Government should work on developing a mechanism with clear rules to avoid, as much as possible, the repeated closure and reopening of premises.
In an exceptional time, the Government should take a forward-looking approach to reviewing and enhancing Hong Kong’s operating environment. For example, cutting red tape is one way to reduce unnecessary administrative costs for businesses, which will also help to lay a solid foundation for our future economic recovery.
Jeffrey Lam
jeffrey@jeffreylam.hk