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