HK pledges $1.5b SARS economic package<\/p>\n
Agence France-Presse, Hong Kong<\/p>\n
Hong Kong chief executive Tung Chee-hwa on Wednesday announced
\na US$1.5 billion economic package to soften the impact of the
\ndeadly SARS outbreak, which has devastated the travel and retail
\nindustries.<\/p>\n
The package worth HK$11.8 billion ($1.5 billion) includes
\nreductions in fees and rates for the worst affected industries
\nand for residents.<\/p>\n
Severe Acute Respiratory Syndrome (SARS) has killed 99 people
\nin Hong Kong and the local economy has taken a heavy hit. Cathay
\nPacific Airways has cut the number of its flights almost in half,
\nhotels and restaurants are nearly empty and retailers claim their
\nsales have fallen by more than 50 percent.<\/p>\n
"Much careful consideration has been given to the measures
\nwhich we believe will help to relieve the short term impact of
\nthe effect of SARS," Tung said at a press conference.<\/p>\n
"We also took into account the medium term need to maintain
\nfiscal balance and took into account the possible effect of the
\npackage on the financial markets," he added.<\/p>\n
Under the new measures, public housing estate residents will
\nreceive a 25 percent rent reduction while businesses in
\ngovernment-owned buildings will get 30 to 50 percent rent cuts.<\/p>\n
Property rates will be waived and there will be concessions
\nfor water, tariffs and sewage charges.<\/p>\n
License fees for businesses most affected by SARS including
\ntourism, bus and coach operators, will be waived for a year,
\ncosting the government HK$280 million.<\/p>\n
Water and sewage charges for residents will be suspended at a
\ncost of HK$1.7 billion and taxpayers will receive tax rebates
\ntotaling HK$2.8 billion.<\/p>\n
The three hardest hit sectors -- catering, retail and
\nentertainment -- will be eligible for a HK$3.5 billion loan
\nscheme in which the government will act as guarantor.<\/p>\n
The government will aim to create 21,500 training and short-
\nterm jobs in the service sectors hardest hit by SARS.<\/p>\n
"The government will set aside one billion dollars so it can
\nlaunch large scale publicity and promotion campaigns both locally
\nand internationally to promote Hong Kong to help revive the
\neconomy," Tung said.<\/p>\n
Some HK$1.3 billion will also be provided for disease control
\nand public hygiene.<\/p>\n
"However, the first priority is to control spread of the
\ndisease and to bring the number of cases down to a minimum as
\nsoon as possible," Tung added.<\/p>\n
Despite stepped up government efforts to contain the spread of
\nSARS, which has no cure, more than 1,400 people have been
\ninfected since it first erupted in the former British colony
\nabout seven weeks ago.<\/p>\n
Dao Heng economist Daniel Chan said the measures were likely
\nto help ease the impact of SARS on the tourism and leisure
\nsectors, but were unlikely to have any stimulative effect on the
\nlocal economy.<\/p>\n
"This is just a relief package for the severely affected
\nindustries and I think it will help them to some extent. Of
\ncourse, for them it is much better than nothing. But this package
\nwill not stimulate the economy," Chan told financial newswire
\nAFX-Asia.<\/p>\n
Financial Secretary Antony Leung is due to release further
\ndetails of the measures later in the day.<\/p>\n
Earlier this month, Leung said the government's target for 3.0
\npercent economic growth this year cannot be achieved due to SARS.<\/p>\n
The territory has been devastated by the SARS epidemic since
\nthe World Health Organization issued an unprecedented travel
\nadvisory on April 2 warning against travel to Hong Kong and the
\nneighboring Chinese province of Guangdong, where the virus first
\nemerged in November last year.<\/p>\n
The key aviation industry has been hit hardest with at least
\n40 percent of all flights canceled.<\/p>",
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