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Opinion | Hong Kong’s recovery from coronavirus and protests depends on employers joining subsidy scheme
- City’s largest employers owe it to their employees and the Hong Kong economy as a whole to do whatever they can to ensure their survival
- The Employment Support Scheme will give people the confidence they need to continue spending and driving the economic recovery forward
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Why you can trust SCMP
Employers across Hong Kong have started applying to the government’s Employment Support Scheme. While some seem determined to make it difficult for large, well-funded businesses to participate, the economic argument is clear: all able and eligible employers should be encouraged to join the scheme as that is best for their employees and Hong Kong’s economy.
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The scheme is a cornerstone of the government’s programme to shore up Hong Kong’s economy. It underpins confidence over the coming crucial months with the economy seeking to rebound from the global pandemic and local social unrest.
The scheme aims to free most of Hong Kong’s private-sector employees from the fear of losing their jobs by providing financial support to employers in return for an upfront commitment to maintain headcount over the period of the scheme. The government has earmarked HK$81 billion (US$10.4 billion) for the scheme.
It is a hefty cost if the aim is simply to help employees feel better about the future. But the scheme is not just about feeling good, though. It is about giving people the confidence to continue buying goods and services and investing in the future. The scheme is a gigantic investment in public sentiment.
Consumption needs a boost if the economy is to recover. Like other advanced economies, private consumption accounts for close to 70 per cent of Hong Kong’s gross domestic product. If a significant proportion of the workforce fears for their jobs, we will struggle to recover as fast as other regional economies. Any delay in re-establishing growth risks a fundamental and permanent impact on the city, major businesses and the livelihoods of all citizens.
There is a growing debate in Hong Kong and globally about whether larger businesses should benefit from schemes like the wage subsidy scheme. Some argue larger businesses should decline government support so more funds are available for smaller businesses that are less able to survive the downturn.
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