'Wage Subsidy Has Come A Little Late For Businesses'

A representative of small and medium enterprises on Friday said the government’s wage subsidies programme came a little late, but will still lend a lifeline to businesses struggling amid the Omicron outbreak.

Danny Lau, the honorary chairman of the Small and Medium Enterprises Association, said he welcomes the authorities' decision to give employers HK$8,000 for every eligible worker for three months starting May. 

“I estimate about 15 to 20 percent of the enterprises are struggling at the moment, so if they can benefit from the scheme, they may be able to survive,” he told RTHK.

But Lau said the scheme could have saved more businesses if it had been announced earlier, as some restaurants, gyms and beauty parlours have already gone under.

“If it had been [announced] earlier, the result would have been even better. Some [companies] have already closed or they are running the closing procedures, those companies cannot benefit from this scheme. This is a bit unfortunate.”

The Hong Kong General Chamber of Commerce, Chinese General Chamber of Commerce and the Chinese Manufacturers’ Association also welcomed the latest initiative, saying it’s much needed to help struggling businesses ride out the current crisis.

But an economics scholar – Kevin Tsui of Clemson University – cast doubt over the cost-effectiveness of the scheme, saying relaxing social distancing measures will have a bigger effect in stimulating the economy.

“People just don’t want to consume given the current situation, so I think it’s more important to reopen the economy in terms of stimulating the market, more so than doing this kind of benefit, because even though [shops] open the doors, there are no consumers," Tsui said.