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Hong Kong Finance Chief Issues Budget Warning, Says Unemployment Could Rise If Fourth Wave Of Covid-19 Is Not Under Control
Hong Kong’s next budget would be in the red again after its highest deficit on record this year amid the coronavirus pandemic, the city’s chief financial officer warned Sunday. Finance Secretary Paul Chan Mo-po, He also said that the city’s unemployment rate, which fell marginally to 6.3 percent last month, could rise again in the coming months if the fourth wave of Covid-19 infections were not quickly contained. Chan’s new warnings about the dire financial situation came on the same day the government officially launched the public consultation exercise for the annual budget, due to be delivered on February 24. Get the latest insights and analysis from our global impact newsletter on the great stories originating in China. “This year, the government has faced an unprecedented budget deficit of HK $ 300 billion (US $ 38.7 billion) and it is estimated that next year’s budget would inevitably be in the red,” Chan wrote in his weekly blog on Sunday. “It is a great challenge.” Chan also disguised himself as a chef in a promotional video and urged members of the public to participate in the consultation. “How can I cook to your liking when I don’t know what you have in mind?” Some of the key goals in writing the budget, he said, were to introduce a series of policies to support residents most severely affected by the pandemic, maintain the city’s economic vitality and also plan for the post-pandemic economic recovery. A source familiar with the budget said the government was considering how it could cut spending and increase revenue in the face of the huge financial shortfall, including reviewing how many sweeteners should be distributed. In one of the consultation sessions, questions were raised such as whether Hong Kong people should still receive a universal cash donation or whether tax refunds should be reduced. Hong Kong Covid-19 Fourth Wave: Trade Closure Warning, Mall Curfew The source said that while the administration believes that the city should further strengthen the IPO market, which attracts foreign companies to list in Hong Kong, the development of the city’s technology zone in Lok Ma Chau loop should also accelerate to attract more financial and IT companies to develop and invest in new technologies. The development of the area was highlighted as a key project by Chinese President Xi Jinping in his speech on the 40th anniversary of the establishment of Shenzhen specialty. Chan also noted that the latest social distancing measures, which limit gatherings to no more than two people, prohibit dining in restaurants after 6 p.m. and have seen gyms and beauty salons being ordered to close, dealt a major blow. to companies that had counted on the Christmas holidays to recover lost income. He acknowledged the fact that the latest round of financial aid, totaling HK $ 6.4 billion (US $ 826 million), might still not be enough for companies that had been struggling to stay afloat. Under the scheme, a total of HK $ 5.5 billion would be distributed through 19 subsidy schemes aimed at companies operating in the entertainment, catering and education sectors, as well as beauty and massage salons, all of which are They were hit by stricter social distancing rules, with the remaining HK $ 900 million set aside for emergency use. “Although the subsidy has doubled the amount that was injected [into the anti-epidemic fund] in September, it is still a drop in the bucket for those sectors that have been struggling for a long time, “he said. “At best it could be a temporary relief, but it would not be a long-term solution to the root of the problem.” What businesses really needed was for social distancing measures and border controls to be lifted, Chan said, adding that the government would strive to contain the pandemic.[Getting the pandemic under control] it’s the only way to resume normal business, investment and consumption Mo Pak-hung, Economist, Baptist University The Finance Committee of the Legislative Council was expected to examine the funding proposal for the latest round of financial aid on Monday. Meanwhile, George Leung Siu-kay, CEO of the Hong Kong General Chamber of Commerce, urged the administration on Sunday to reintroduce wage subsidies. The six-month plan, a financial lifeline that helped employers in all sectors retain employees, ended in November. Reintroducing the plan was the best way to help the hardest hit companies not covered by the latest round of relief measures, he said. .Leung suggested that the administration offer wage subsidies to companies with attached conditions, after considering their turnover. He believed it would help minimize the waste of resources. The Hong Kong government made it clear earlier that there would be no more wage subsidies for companies under the Employment Support Scheme (ESS), and said public money would be spent on other forms of assistance that would focus on the most affected industries. for the pandemic. Hong Kong’s finance chief sounds alarmed by the city’s financial stability Baptist University economist Mo Pak-hung agreed that the best way to get Hong Kong out of recession was to control the pandemic. “This is the only way to resume normal business, investment and consumption,” he said. “Land premiums can go up, which in turn would increase government revenue.” He stressed that the government should also reform the tax system and resolve deep-seated divisions in the city in the long run. Mo said he expected the city’s economy to pick up soon.Professor Terence Chong Tai-leung, an economist at China University, said the government could consider another salary freeze for the city’s 180,000 officials next year as their Salaries represent a significant portion of your recurring expenses. He also suggested that the government increase the stamp tax for stock transfers to expand its sources of revenue, adding that it was a relatively painless option and would face fewer public protests. Most of the stock transactions in Hong Kong involved funds, he said, which the stamp meant. The fees were largely paid by outsiders rather than locals. Chong hoped that most of the relief measures implemented in previous budgets would be maintained. But he said the administration would have little capacity to offer universal cash handouts to Hong Kong residents. More from the South China Morning Post: * Hong Kong’s Fourth Wave: Wage Subsidies ‘Not on the Government’s Agenda’, Says No. 2 Official, Citing Financial Strain * Hong Kong’s Unemployment Rate Falls to 6.3 Percent, But Labor Market Pressure Is Likely To Increase Amid Wave 4, An Official Warns * Hong Kong’s Fourth Wave: Government Reversing Course, Revealing Another $ 6.4 billion Aid Round Hong Kong for the most affected companies. Kong’s finance chief issues a budget warning, says unemployment could rise if the fourth wave of Covid-19 is not under control first appeared on the South China Morning Post For the latest news from the South China Morning Post, download our mobile app. Copyright 2020.
