Hong Kong Chief Executive Carrie Lam announced plans Tuesday to increase the number of mandatory days off for workers in the city to 17 from 12 as part of the government’s latest attempt to support those affected by the unrest.
The livelihood measures, which will cost about HK$10 billion ($1.29 billion), also include:
• Extending the HK$2 transport fare concession to those age 60 and older, from age 65 currently.
• Relaxing the asset limit used to determine eligibility for the elderly allowance.
• Cash handouts, with amounts still to be determined, for the unemployed and low-income people.
Economists said that while the initiatives may help some affected by the city’s downturn, they likely won’t provide much of an economic boost. “The changes in requirements for elderly subsidies and the additional unemployment benefits make sense from a social welfare perspective, but I won’t expect them to have visible impact on the economy,” said Tommy Wu, senior economist with Oxford Economics.
Raymond Yeung, chief Greater China economist at Australia & New Zealand Banking Group Ltd. in Hong Kong, said the statutory days off will essentially align “the holidays enjoyed by white-collar versus blue-collar” workers. “The impact will primarily be very micro, if you think about how big the size of the population that will be affected by alignment,” he said. “Is there any real impact in terms of the macro economy? I’m not sure.”
The holiday initiative had not been discussed with the business community, Lam said at a news conference outlining the measures. She added that the plan may incur extra operating costs for businesses but they could adjust in the longer term. The government is willing to take the lead, and even lean toward the side of labor on measures related to worker rights, Lam said.
Financial Secretary Paul Chan in an interview with Bloomberg Television’s Yvonne Man last week cooled talk of a cash handout in his upcoming budget, slated to be released Feb. 26. He said the government would “spend boldly” to help the disadvantaged.
The latest round of stimulus adds to the HK$25 billion ($3.2 billion) in spending announced by the government since the start of protests in June, which economists have criticized as amounting to “peanuts” relative to the economy’s size and Hong Kong’s ample fiscal reserve.
Months of violence and unrest has led Hong Kong to fall into a recession with the number of visitors from mainland China plummeting by more than half, unemployment climbing and retail shops shuttering. Sentiment in the Asian finance hub has brightened somewhat since November, with the latest small business sentiment index rising to its highest level since June. As the prospect of a tourism rebound is still remote, chances of stabilization hang on the city’s strengths in finance and trade.
