- Most of the relief fund earmarked to subsidise employees’ wages in affected industries
- Lam and ministers slash their salaries following controversy over chief executive’s pay
More than 1 million Hong Kong workers will have part of their wages paid for by the government under a HK$137.5 billion package of measures to help businesses and residents struggling during the Covid-19 crisis, while the city’s leader and her ministers have vowed to take a pay cut, the Post has learned.
Revealing the massive relief fund on Wednesday, Chief Executive Carrie Lam Cheng Yuet-ngor said HK$80 billion would go towards the wage scheme, targeting coronavirus-hit industries over six months with individual payments capped at 50 per cent of salaries, up to HK$9,000 a month. The employers receiving the lifeline must pledge not to lay off workers, she added.
Hong Kong records 25 new cases, including two-month-old baby; tally at 960
Lam said the package, together with other recent pledges of financial relief, would cost a total of HK$287.5 billion, causing the budget deficit to surge from HK$139.1 billion this financial year to HK$276.6 billion, which is equivalent to 9.5 per cent of gross domestic product.
Meanwhile, Lam’s monthly salary will fall to HK$390,000 after rising to HK$434,000 last July.
Lam and her 16 ministers had voluntarily agreed to a 10 per cent pay reduction for a year, the chief executive told the press conference.
The HK$137.5 billion deal – which was given the green light by her Executive Council earlier in the day – aims to safeguard employment and ease the woes of businesses, with the number of confirmed Covid-19 cases in the city reaching 960 on Wednesday.
A source said: “The scheme is aimed at coping with the economic hardship brought by the pandemic in the next six months. More than 1 million employees from various sectors, on top of those directly affected by the government’s social-distancing measures, will benefit.”
Staff affected by the latest social-distancing rules – including businesses forced to close – will benefit from the wage scheme, along with employees in sectors such as tourism and construction, two other sources said.
Some businesses set to benefit would be those related to education, such as tutorial centres, school bus operators and PE coaches contracted from outside, according to one.
“The government is drawing reference from the British government’s recent practice of paying 80 per cent of salaries of employees in affected industries, although the percentage and cap are lower in Hong Kong,” one source said.
In an unprecedented step announced last month, the UK government said the state would pay grants covering up to 80 per cent of salaries if companies kept workers on the payroll rather than laying them off.
In Singapore, the government has offered to pay 75 per cent of workers’ April wages, capped at S$4,600 (HK$25,000) per person.
The Japanese government on Tuesday approved its largest-ever economic relief package, which includes grants of up to 2 million yen (US$18,350), for small and medium-sized businesses whose revenues had more than halved.
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