LCQ11: Support for retail industry
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Question:
According to the data from the Census and Statistics Department, the value of total retail sales in November last year was provisionally estimated at $29.5 billion, representing a year-on-year decrease of 4.2 per cent, and taking together the first 11 months of last year, the provisional estimate of the total retail sales also decreased by 3.6 per cent in volume when compared with the same period in 2021. Members of the retail industry have generally relayed that although there is increasing public traffic amid the relaxation of the anti-epidemic requirements, the sector is not benefitted. The drop in retail sales figures in November last year has also reflected to a certain extent the impact of more members of the public travelling abroad following the relaxation of the arrival quarantine arrangements in Hong Kong on the local consumption market. Besides, it has been reported that quite a number of retail shop owners have imposed rental increases immediately after the news about the resumption of normal traveller clearance has been released. In this connection, will the Government inform this Council:
(1) whether it has plans to introduce measures to provide policy support to small and medium enterprises in the retail sector during the period of the gradual recovery of the economy; if so, of the specific details; if not, the reasons for that; and
(2) whether it has assessed the stimulus effect of the last round of counter-cyclical measures on the retail industry; if so, of the specific details; if not, the reasons for that?
Reply:
President,
Having consulted relevant bureaux and departments, the Government's consolidated reply to the two parts of the question is as follows:
The Government introduced large-scale counter-cyclical measures in recent years to alleviate the pressure caused by the economic downturn and the epidemic. Among others, the Consumption Voucher Scheme rolled out under the 2022-23 Budget injected over $60 billion of purchasing power into the local consumption market, providing substantial support to the retail trade. The statistics compiled by the Census and Statistics Department indicate that the value of total retail sales still increased by 2.7 per cent and 1.4 per cent year-on-year in the second and third quarter of 2022 respectively, notwithstanding the impact of tightened financial conditions and the consequential weak asset market performance. The total retail sales value in October and November also held largely stable compared to a year earlier. These show that the consumption voucher is conducive to supporting local consumer sentiment, stimulating demand and maintaining market confidence.
In addition, to further support small and medium enterprises (SMEs), it was announced in the 2022 Policy Address that the reduction of 75 per cent of water and sewage charges for non-domestic accounts, subject to a monthly ceiling of $20,000 and $12,500 respectively per household, would continue until the end of July 2023. The Government also continues to provide 75 per cent rental and fee concessions currently applicable to eligible tenants of government premises and eligible short-term tenancies and waivers under the Lands Department, until the end of June 2023. To continue to help businesses address liquidity problems, it was also announced in the 2022 Policy Address the extension of the application period of the principal moratorium under the SME Financing Guarantee Scheme to the end of June 2023, with the maximum duration up to 42 months, to further alleviate the instant repayment pressure of SMEs.
Apart from helping SMEs alleviate their operational pressure, the Government also actively supports SMEs to carry out promotion activities and develop their businesses. The funding scope of the SME Export Marketing Fund (EMF) has been expanded since April 2021 to cover large-scale exhibitions and online exhibitions targeting the local market. This enhancement has been well received. As at the end of December 2022, the EMF has approved more than 3 800 applications from the wholesale and retail sector targeting the local market, involving a total funding of nearly $100 million. It was announced in the 2022 Policy Address the increase of the cumulative funding ceiling per enterprise under the EMF from $800,000 to $1 million, and the extension of the above expansion of funding scope until the end of June 2026.
The various measures mentioned above should help the retail sector alleviate its operational pressure and develop its business. As the economy gradually returns to normalcy and the number of tourists visiting Hong Kong is expected to rebound significantly, the local retail and other sectors will be given a greater impetus of recovery.
Ends/Wednesday, January 18, 2023
Issued at HKT 12:00
Issued at HKT 12:00
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