$11.8 billion economic relief package announced by Chief Executive
A package of economic relief measures worth some $11.8 billion was announced today (April 23) by the Chief Executive, Mr Tung Chee Hwa, to provide short-term relief for sectors hardest hit by the outbreak of severe acute respiratory syndrome (SARS).
The measures were discussed at a special meeting of the Executive Council
this morning and were outlined to the Financial Affairs Panel of the Legislative
Council by the Financial Secretary, Mr Antony Leung, later in the day.
At a media briefing after the Exco meeting, Mr Tung said the package was
designed to reduce the impact of the disease on various sectors.
"The relief measures we discussed include how to reduce the impact of the outbreak of atypical pneumonia on our economy, help the community tide over the current difficulties and prepare the ground for the recovery of our economy when we have been able to contain the disease," Mr Tung said.
The 8-point package covers:
* A reduction in business operating costs through a concession on rates, water and sewage charges and effluent surcharges for one quarter. The majority of retail outlets in government-managed properties will also see their rent fall by 30% to 50%. The concessions are worth about $1.09 billion.
* A one-year waiver of licensing fees for tourism-related businesses, caterers, retailers, taxis, school buses and tourist coaches, costing the government some $280 million.
* Rates, water and sewerage concessions for the general public for one quarter, worth an estimated $1.77 billion.
* A partial rebate of salaries tax for taxpayers that will cost the government $2.3 billion.
* A $3.5 billion loan guarantee scheme for the four hardest hit economic sectors - retail, tourism, entertainment and catering. The government will act as guarantor for loans from authorised financial institutions to enable these businesses to pay their staff salaries and protect jobs.
* The creation of 21,500 training places and short-term jobs by the government to strengthen service training in the most affected areas. These jobs will provide home cleaning services for the elderly and boost environmental hygiene. It will cost about $430 million.
* A $1 billion publicity campaign to promote Hong Kong at home and overseas to encourage the resumption of normal trade activities when SARS is brought under control.
* The allocation of $1.3 billion for medical research and enhancing public health as longer-term measures to control SARS.
As announced yesterday, a new $200 million fund is earmarked for healthcare training and assistance to medical workers who have been affected by the disease.
Mr Tung also announced that in the next six months, the government would not propose any adjustment to government fees and charges.
"I would like to emphasise that the entire package of measures is a very well and thoroughly considered one. The measures seek to relieve the short-term impact of atypical pneumonia on our economy," he said.
"They have also taken into account the medium-term need to make sure our budget is in balance and the possible impact of the package on the financial market.
"Our priority remains to prevent and control the disease and this, above all, must be the most important task we all have."
However, Mr Tung said it was necessary to plan for arrangements to revive Hong Kong's hard-hit economy in the medium and longer term.
"I believe that the package announced today will relieve to a certain extent the short-term difficulties of various sectors," he said.
After briefing members of the Financial Affairs Panel in the Chamber of the Legislative Council this afternoon, the Financial Secretary said he believed the proposals had the general support of the members.
"We would like to present the proposals [for approval] to the Legislative Council in the immediate future. In particular, we would like to launch the relief loan guarantee scheme as quickly as possible so that the affected industries and the affected establishments can be provided with help as soon as possible," Mr Leung said.
He said he was confident Hong Kong would meet its fiscal targets for 2006-07, despite the nearly $12 billion package announced today. At the same time, the budget, the peg to the US dollar, and Mandatory Provident Fund contributions would also not be affected by the "one-off measure to tackle a one-off problem".
"The budget represents a good set of measures that will solve the [fiscal deficit] problem over the medium term. So what we have are two sets of proposals; one set addressing the [fiscal] problem, another set represents the one-off measures to counter what I hope will be a one off situation [with SARS]," Mr Leung said.
He said the budget deficit would be higher this year, but until the virus was controlled it was too early to predict with accuracy what the economic costs would be. However, he expected the budget deficit to eventually shrink under the measures which he said most legislators support.
End/Wednesday, April 23, 2003
