Summary on COVID-19 Hong Kong Economic Relief Measures – Phase 2

Summary on COVID-19 Hong Kong Economic Relief Measures – Phase 2

The Chief Executive Carrie Lam has announced a HK$137.5 billion (US$17.6 billion) economic relief package to help individuals and industries affected by the COVID-19 outbreak yesterday (8th April 2020).

This takes to HK$287.5 billion (US$36.85 billion) – about 10% of GDP – the total pledged by the HKSAR Government to help offset the economic fallout from COVID-19 including the HK$120 billion relief package in the 2020-21 Budget and the HK$30 billion anti-epidemic fund.

The 2020-21 deficit will rise to HK$276.6 billion (9.5% of GDP) from the Budget forecast of HK$139.1 billion (4.8% of GDP).

The package covers four major areas:

  1. Job retention, job creation, job advancement
  2. Sector specific relief
  3. Government rental concessions, fee waivers, deferral of loans
  4. Government facilitation in other areas

1. Job Retention, job creation, job advancement

On job retention, the government will launch a HK$80 billion employment subsidy scheme

  • All employers making MPF contributions are eligible
  • Capped at $9,000 per month (i.e. 50% of monthly median wage of HK$18,000) per employee for six months

On job creation, the government and private sectors will create 30,000 time-limited jobs at a cost of $6 billion; civil service will recruit 10,000 people in 2020-21

On job advancement, government introduces six measures to encourage staffs to learn new skills and help enterprises to apply technology.

  • LAWTECH fund: technical support and training for SME law firm/ barristers’ chambers
  • COVID-19 Online Dispute Resolution (ODR) scheme: HK$ 70 million to provide ODR services for dispute
  • Encourage Deployment of 5G: HK$ 60 million scheme for public and private sectors to subsidise 50% of their 5G deployment projects
  • Distance Business Programme: HK$ 500 million programme to support enterprises to continue business with technology adoption and related training
  • Training Subsidies for the Construction Sector: HK$ 30 million training subsidies for consulting firms under the Construction Industry Council (around HK$ 50,000 for each company
  • Matching Grants for Skills Upgrading: HK$ 100 million matching grants for training programmes for staff in the public and private sectors

2. Sector specific relief (HK$21 billion pledged for 16 support measures)

  • One-off relief grant of at least HKD$ 7500 for service providers and suppliers for schools and post-secondary education institutions (e.g. private schools offering non-formal curriculum, lunchbox providers, school bus drivers, instructors for interest classes, sports coaches)
  • One-off subsidy for sectors which are completely or partly closed due to government health safeguarding measures
    1. HK$ 100,000 for amusement game centres, commercial bathhouses, fitness centres, amusement facilities (i.e. billiard establishments/ public skating, operator of club house, holders of a place of Public Entertainment Licence PPEL, Mahjong/ Tin Kau license)
    2. HK$ 30, 000 to $100, 000 for beauty parlour operator and massage depending on the size of the premises
    3. Cinema Subsidy Scheme: HK$ 100,000 subsidy per screen to cinema; The maximum subsidy for a cinema circuit is HK$ 3 million
  • Support for tourism industry: subsidy ranging from HK$ 20,000 to 200,000 for licensed travel agencies, HK$ 300,000/ 400,000 for licensed hotels
  • Support for aviation sector: one-off subsidy of HKD $1 million per large aircraft and HK$ 200,000 per small aircraft register in Hong Kong, one-off subsidy for aviation support services and cargo facilities (HK$ 3 million for operators with 100 employees or above, HK$ 1 million for companies with less than 100 employees)

3. Government rental concessions, fee waivers, deferral of loans

  • Enhancement of the SME Financing Guarantee Scheme: special enhancement up to 100% guarantee, additional guarantee commitment of HK$ 30 billion
  • Extend the 75% waiver of water and sewage charges for non-domestic accounts for another four months from Aug to Nov 2020
  • Deadline for payment of tax for year of assessment 2018/19 that will be falling due will be automatically extended for three months

4. Other relief through Government Facilitation

  • Airport Authority Hong Kong (HK$ 2000 million)
  • The Hong Kong Monetary Authority
  • The Insurance Authority and Industry stakeholders

 

 

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