Coronavirus: promises of transparency in HK wage subsidy scheme, amid fears of abuse of Covid-19 relief measure

11-Apr-2020 Intellasia | South China Morning Post | 6:02 AM Print This Post

Officials have promised high transparency when Hong Kong employers dip into the government’s HK$80 billion (US$10.25 billion) wage subsidy scheme to keep paying some 1.5 million workers through the coronavirus crisis, amid concerns about possible abuse and confusion over details of implementation.

Some major companies on Thursday were already declaring their intention to pass on the offer of having the government pay up to 50 per cent of salaries for their workers, capped at HK$9,000 (US$1,160) month.

A day after Chief Executive Carrie Lam Cheng Yuet-ngor rolled out the scheme as part of a HK$137.5 billion (US$17.4 billion) coronavirus relief package, Hong Kong confirmed 13 more Covid-19 cases, the lowest daily count in three weeks, bringing its tally to 973.

Hours before the latest infection figures were revealed to suggest an improving situation, Secretary for Labour and Welfare Law Chi-kwong was on a radio show, reassuring listeners that the government would try to be highly transparent in matters such as identifying companies seeking funds and disclosing the amounts they received.

“Transparency is important. We will try our best to publish all sorts of data,” he said. “We need a mechanism to conduct checks.”

Even as a senior adviser to the government called on bigger companies with the capacity to sustain greater damage to let smaller and needier business operators avail themselves of the scheme first, power supplier CLP Holdings, banking giant HSBC and the Hong Kong Jockey Club, as well as rail giant the MTR Corporation, declared they would not apply for the subsidy.

“CLP has no plan to apply for the wage subsidy now. We hope the resources will be allocated efficiently to help the businesses and their employees that are severely affected by the epidemic,” a CLP spokesman said.

But other major employers, such as developers Sun Hung Kai Properties, CK Asset Holdings, Henderson Land Development, New World Development, Wharf (Holdings) and Sino Land, would not say whether they might follow suit.

A government source said the administration would not discourage big companies from applying for the subsidy.

“It won’t be bad if a big company gets the subsidy and expands its operation,” the source said.

Under the scheme, funding to pay wages would be distributed to employers in two phases, and companies could start applying in June, welfare minister Law said.

Employers could pick a month between January and April as a basis to calculate their payroll when applying for a monthly subsidy of up to HK$9,000 for each of their workers.

“We hope to start applications in June and give the first round of wage subsidies by the end of June,” Law said.

Another government source said employers would have to fill in application forms, and would be held criminally liable for false declarations regarding the number and salaries of employees.

“But of course this only applies to very serious cases, like if a company suddenly hires a lot of employees that causes suspicion, and depends on the manpower we have for checking,” the source said.

“For minor offenders, we may deny them funds from the second round, apart from asking them to return the extra money.”

Law warned that any cases of deception could result in criminal punishment, but he rejected suggestions that larger companies should not have access to the scheme, pointing out they could have many more workers at risk of losing their jobs.

“So in Hong Kong, is it that big companies have no problem?” he said. “Of course, I believe some big firms will not apply because they think they don’t need the help from the government.”

Some businesses would be conscious about being criticised if they asked for money, he added.

Executive councillor Fanny Law Fan Chiu-fun told the Post on Thursday that in addition to transparency, companies would also have to shoulder responsibility.

“I appeal to companies that are able to manage with their own resources not to come to the government for the subsidy,” she said.

“For companies that apply for the government’s wage subsidy, I hope the senior management will set an example by first cutting their own salaries. This will be a positive gesture that we are fighting the epidemic together.”

Fanny Law and other advisers to the chief executive, along with her ministers, are taking a 10 per cent pay cut for a year, which would see Lam’s monthly salary reduced to HK$390,000, after rising to HK$434,000 (US$56,000) last July.

Pro-business Liberal Party leader Felix Chung Kwok-pan said he did not expect highly profitable utility giants to apply for the wage scheme.

“Listed companies which recorded profits in their latest financial year will come under tremendous public pressure if they are found to have filed applications,” he said.

But Chung stressed that many listed companies, including those in the garment and textile sector which he represents in the Legislative Council, were now struggling to cope during the coronavirus crisis, even if they had previously raked in billions in annual revenue.

Cathay Pacific welcomed the government’s latest relief measures to help businesses, including airlines, without commenting on whether it would apply for the wage subsidy scheme.

Top executives and managers at three statutory bodies are taking pay cuts or having their salaries frozen.

Chief executive Fred Lam Tin-fuk and six executive directors at the Airport Authority will take a voluntary pay cut of 20 per cent for half a year starting from this month as a gesture of solidarity with struggling workers.

Urban Renewal Authority managing director Wai Chi-sing and two executive directors are taking a voluntary pay cut for a year, starting this month.

And the Tourism Board is freezing salaries in the 2020-21 financial year for managerial staff, who will also give up extra pay equivalent to 8 to 10 per cent of their annual salary.


Category: Hong Kong

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