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2020-12-14
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Assist specific sectors and their workers immediately with targeted measures

¡iĶ¤å¡jAs the government tightens social distancing measures again starting from 10 December, the plight of the catering and other industries is set to further aggravate, and waves of business closures and layoffs are likely to hit soon. In face of the impending financial downturn where businesses will go bankrupt and workers will be left without a job, the government must take an unconventional approach and swiftly consider tapping into the fiscal reserves to help those sectors and workers.

It has been almost a year since the tightening and loosening cycles of social distancing measures descended upon Hong Kong, and many industries like catering are already engulfed in financial difficulties. In the latest round of tightening measures, dine-in at restaurants will be forbidden from 18:00 to 05:00 until 23 December, while many other premises are also to close. If the pandemic situation continues, these measures are bound to be extended further into the Christmas, New Year's Eve, and even Lunar New Year holiday periods, and catering businesses are going to sustain heavy losses. The catering sector estimates that the original business turnover in December was going to reach HK$16bn, however as social distancing measures tighten again, the figure is set to drop by HK$10bn to HK$6bn only. Meanwhile, the beauty industry also projects a HK$15bn loss in December, and has stated that if the closure order is not lifted by Lunar New Year, businesses will inevitably close for good. Layoffs have long begun already for tourism-related sectors, with Cathay Pacific cutting 5,300 jobs and Wing On Travel 120, trimming 20 per cent of the company's positions.

At present, the unemployment rate in Hong Kong is already at 6.4 per cent, with nearly 260,000 people jobless. As the government's Employment Support Scheme draws to an end, experts predict that the unemployment rate will climb to 7 per cent, and the unemployment rate among young people may reach as high as 20 per cent. Given the circumstances, businesses and wage earners naturally expect the government to provide urgent assistance. Chief Executive Carrie Lam Cheng Yuet-ngor said earlier that the government was under immense financial pressure as it has already allocated HK$310bn to fight the Covid-19 pandemic. However, the government U-turned on the matter recently, and is now willing to "actively respond" to businesses that are affected by closure orders. Subsidies will be provided to save them from the brink of collapse and to prevent the large scale unemployment which would follow. The change in the government's stance towards helping the affected businesses and employees deserves recognition and is certainly the right move given the current situation in Hong Kong. The next step should be to put forth immediately the concrete proposals of how to decisively use the fiscal reserves to achieve these goals.

Indeed, the government has already spent HK$310bn in anti-pandemic relief this year, and a deficit of HK$279.8bn has been recorded in the first half of this financial year. It is also true that the fiscal reserves fell drastically from over HK$1.1tn to HK$880.5bn. However, a fiscal reserve of over HK$800bn is still considered quite abundant when compared with other economies. One of the main purposes of fiscal reserves is to cope with emergent events. As workers, businesses, and even whole industries are now suffering in dire situations due to the Covid-19 pandemic, the government must not just stand by and watch. If this is not the time to use the reserves, when is? Although existing financial policies require the government to keep expenditure within the limits of its revenues, as long as there are no major problems in the local economy, the fiscal reserves should be drawn at this critical moment to help those businesses and workers that are in distress.

But of course, the government must ensure that its emergency relief measures are targeted at those industries and employees who need them most. Plans to relax asset limit requirements for able-bodied applicants of the unemployment support scheme, and plans to increase temporary jobs in the civil service must also be expedited to relieve the burden of unemployed citizens. As Hong Kong is facing the worst economic downturn in over two decades, the government must plan for the worst and act swiftly before it is too late.¡½Jeffrey Tse

Exercise

1. ºî¦XªÀ·|«O»Ù´©§U­p¹º¡]ºî´©¡^

2. ¶Ë´Ý¬z¶K

3. °ªÄÖ¬z¶K¡]¥ÍªGª÷¡^

4. ªøªÌ¥Í¬¡¬z¶K

5. Ãö·R°òª÷

Answer

1. Comprehensive Social Security Assistance (CSSA)

2. Disability Allowance

3. Old Age Allowance

4. Old Age Living Allowance

5. Community Care Fund

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