CE Unveils $138b Relief Package

(To watch the full press conference with sign language interpretation, click here.)

The Government today announced a $137.5 billion package of relief measures to help individuals and businesses tide over financial difficulties during the COVID-19 epidemic, including the introduction of an $80 billion Employment Support Scheme.

Announcing the new measures at a press conference this evening, Chief Executive Carrie Lam said this third round of relief is in addition to the $120 billion package announced in the Budget and the $30 billion Anti-epidemic Fund.

Mrs Lam explained that under the $80 billion Employment Support Scheme (ESS), the Government would provide wage subsidies to eligible employers to retain their employees in return for employers undertaking not to implement redundancy.

“We very much welcome the assisted employees to stay in the job, so that they will get not only our subsidy but will continue to get some pay from the employers. And this is also, in my view, a healthier development, because we want the staff to be engaged in work, so that when the epidemic situation stabilises, then there will be more business.”

The Chief Executive noted that there would be safeguards to ensure the workers received the subsidies.

“We will put in place a very robust audit (mechanism) after the event because I do not want to have detailed vetting before paying out. The employees and employers are now very short of cash, they need money. But we reserve the power to do auditing in order to ensure that the money is spent on wages.

“Secondly, the employers have to promise that there will be no redundancies.

“And of course thirdly, we will operate in a very transparent way. So all the employers who have applied and are approved to enjoy the ESS, we will tell everybody, particularly the employees. So the employees will know that their employers have received wage subsidies which are supposed to be for them, not for their employers. And if they do not get it, then I am sure they will complain, either to us directly or through trade unions.

"So there are safeguards all the way to ensure that the money will go to the employees.”

Mrs Lam noted that employers making MPF contributions will be eligible except those on the exclusion list, ie the Hong Kong Special Administrative Region Government, statutory bodies, and government subvented staff.

The government subsidies are calculated on the basis of 50% of wages, subject to a wage cap of $18,000 per month for a period of six months.

“We have to ensure that the money that we are providing is reasonable to enable the employers to keep the employees in the job. If we provide too small an amount the employer will continue to have difficulty in keeping that employee in the job. But if we provide too large an amount, then it is a question of affordability. Now this package at 50% of wage cap of $18,000 already costs $80 billion. So I would say that 50% is about the right percentage.”

Payment will be made to employers in two tranches, with the first payout no later than June. It is estimated to cover 1.5 million employees.