Govt Plans Billion-dollar Aid, But No Handouts

The government appeared to rule out any further cash handouts – as demanded by some political parties including the city's biggest pro-Beijing party DAB – as it announced another round of targeted relief measures aimed at industries hardest hit by the economic downturn.

At a briefing held to announce relaxations of some social distancing measures, Financial Secretary Paul Chan said HK$4.5 billion will be used to support 23 specific industries deemed to have been hardest hit by the pandemic, like tourism and the food and beverage sectors.

Asked about calls for more handouts to the public, Chan said they are looking at the prudent use of limited resources.

"We understand the financial hardships that many people are going through because of the economic situation," he said.

"However as you know public resources, financial resources is rather limited. We believe ... a combination adopting a more targeted approach is more appropriate in the current circumstances," said the finance chief.

Billions more will be spent on extending many existing support schemes – including special payments for the unemployed, which will now run for six more months until the end of May.

The government is also setting aside HK$10 billion to buy Covid vaccines as they become available.

Local businesses will be allowed to borrow more money – up to HK$5 million – in loans fully guaranteed by the government. Rates and government rents for commercial properties will be reduced further, and a host of government charges will be exempted for a longer period.

Chan said this unprecedented spending will see Hong Kong's budget deficit soar to around HK$300 billion this financial year, and whittle the city's fiscal reserves down to around HK$800 billion.

In the run up to the Policy Address, political allies of the government like the DAB and Federation of Trade Unions have urged Chief Executive Carrie Lam to announce another round of cash handouts to the public.

Earlier this year the Lam administration had paid HK$10,000 to all permanent residents of the city to face the economic hardships as Covid-19 outbreaks choked the economic activities.