MR YIU SI-WING (in Cantonese): President, this year's Budget has met unprecedented challenges. Under the impact of the novel coronavirus epidemic, there is currently a continued drop in Hong Kong's overall economy and employment rate, bringing about more serious and far-reaching impacts than that of SARS in 2003.

 

While the SARS epidemic only broke out in a few regions and countries, there has been a global outbreak this time around. While the epidemic has started to come under control in Macao, Hong Kong and the Mainland, we still have no idea when it will come to an end at the global level, making us feel that an economic recovery is nowhere in sight.

 

One may say that the current outbreak has aggravated the predicament faced by the tourism industry. Since the riots arising from the opposition to the proposed legislative amendments in June last year, inbound tourism has taken an immediate hit, and outbound tourism has also felt impacts of varied degrees. After going through business hardship for half a year, the tourism industry kept fingers crossed for, restoration of order and peace in society and possible revival of business approaching the peak season of tourism this Lunar New Year. Regrettably, the novel coronavirus epidemic suddenly broke out in Wuhan in January. Since late January, Hong Kong and the Mainland have successively implemented border closure in phases. With the issuance of the Red Outbound Travel Alert on all overseas countries and the implementation of the 14-day quarantine policy by Hong Kong following the subsequent outbreaks in different places around the world, both inbound and outbound visitors can hardly be seen.

 

In recent days, there have only been a few hundred inbound and outbound passengers per day, which simply pale in comparison to the daily average of 100 000 to 200 000 passenger trips previously. Over the past few months, travel agents organizing inbound, outbound or local tours have all been moaning and groaning as they just see money going out but not coming in, which can be regarded as the hardest hit industry among all. Recently, Mr CHU Hoi-dick has gone so far as to say that tourist guides have received unwarranted special treatment from the Government. His remark proves that he is entirely detached from reality, knowing nothing about the hardship faced by the industry. He should know that since the riots arising from the opposition to the proposed legislative amendments, quite a number of tourist guides have been left with no income for 10 months in a row. Travel agents have now been brought to a complete standstill. I hope Mr CHU can better understand and comment objectively on the actual situation of various sectors instead of stirring up social conflicts by making sweeping statements.

 

President, while the tourism industry has directly employed only 270 000 workers of the local labour force, its service chain is rather long which, according to conservative estimates, has directly and indirectly facilitated the employment of more than 800 000 people in a number of sectors. The disturbances arising from the opposition to the proposed legislative amendments last year and the current epidemic have fully reflected the ripple effects of tourism on the overall economy of Hong Kong. In addition to travel agents, tourist attractions, hotels and aviation, other affected sectors include retail, catering, transport, logistic or even real estate, advertisement design and insurance services. Take the retail sector as an example. According to government statistics, spending by visitors to Hong Kong has accounted for as high as 40% of the total volume of domestic retail sales in recent years. The drastic drop in the number of visitors has brought down the income of workers in a number of associated sectors. They have started to take no-pay leave or even become jobless. It is an indisputable fact that the overall economy of Hong Kong has been mired in recession due to sluggish sales.

 

At this difficult time, the Government has launched several rounds of relief measures and two rounds of Anti-epidemic Fund ("AEF"), setting aside more than $20 billion of the fiscal reserves aimed at safeguarding jobs and supporting enterprises. Such initiatives are commendable, particularly the disbursement of the second round of AEF given its wide coverage and massive funding, which will be of great help to most companies and employees in difficulty in Hong Kong. Certainly, as the saying goes, "the problem lies not in scarcity but uneven distribution". As the Government aimed at assisting enterprises and workers at the soonest possible time, omissions were inevitable when formulating the relevant support measures this time around. I hope the Government can plug the gaps and assist more members of the public and enterprises in need as far as practicable.

 

Under the current exceptional circumstances, it is the collective wish of employees and companies across the territory to obtain the funding early. While there are still inadequacies, including the fact that a number of my suggestions made to the Secretaries of Departments and Directors of Bureaux have failed to achieve the desired effect, given the pressing task to support enterprises and safeguard jobs, I, as a Member and representative of public opinion, certainly supported the funding proposal for the second round of AEF when it was put to vote at the meeting of the Finance Committee last Saturday. The earlier it is passed, the earlier the relief will be granted. It is the general wish of members of the public, which is also a matter of black and white. Nevertheless, the opposition camp proposed at the meeting that the proceeding be adjourned, obstructing the smooth conduct of the meeting. Eventually, they even ignored the plight of the public and voted against the proposal collectively. I hope Members from the opposition camp will no longer be carried away by the victory in the District Council election. Instead of taking a political path that leads to mutual destruction, they should think more about the present plight of members of the public with empathy, and do more solid work for the community, including lending their support to this year's Budget.

 

President, this year's Budget can basically achieve flexible allocation of resources with expanded scope of subsidies based on the needs of various sectors. But when it comes to tax relief and rates concession, the measures proposed in the Budget lack new ideas, which are generally the same as the ones offered last year, and the recent relief measures have not provided extra concessions in the relevant areas either. It is observed that in the general economic environment of Hong Kong at present, most households and enterprises have encountered difficulties, and they often have cash flow problems. Under the existing mechanism, taxpayers may apply to the Inland Revenue Department ("IRD") for holdover of provisional tax. Yet, IRD has to process the applications on a case-by-case basis, which is cumbersome. I hope the Government can consider allowing employees and enterprises of the relevant sectors, such as tourism, retail, catering, hotel and aviation, which are most affected by the disturbances arising from the opposition to the proposed legislative amendments and the epidemic, to hold over the payment of personal salaries tax and profits tax payable by companies for the current year, so as to ease their burden.

 

Second, the Government should also consider granting rates concession to those sectors which feel a more far-reaching impact of the epidemic. Take the hotel sector as an example. Occupancy rates are currently in the single digits, and worst of all, it is not known when the tough time will end. In view of the substantial daily and payroll costs, the Government should try to offer assistance. Although each hotel will get a subsidy of $300,000 or $400,000 from the second round of AEF, it is utterly inadequate for the hotel sector. The best way to give them direct assistance is rates concession, which I hope the Government can consider.

 

President, with an additional amount of $790 million allocated to the Hong Kong Tourism Board ("HKTB") in this year's Budget, as well as the money left behind from cancellation of some activities and promotional programmes by HKTB last year, the marketing budget available to HKTB for the current year is estimated to be $1.2 billion, which I consider necessary. As announced by HKTB earlier, with the new budget of $400 million, a three-pronged strategy, i.e. stimulating domestic consumption, stepping up marketing efforts and boosting the number of overnight visitors, will be adopted. I consider that under the exceptional circumstances, particularly when Hong Kong's tourism industry has come to a standstill, the allocation of additional resources to HKTB merits support.

 

The disease now spreads around the world. According to the latest figures, Hong Kong may soon become a region with zero infection. Given the external uncertainty surrounding the epidemic and traffic disruptions, it is anticipated that Hong Kong people will have little desire to travel. According to the experience back in 2003, in the early stage of the upswing, members of the public preferred joining local tours, which served to boost domestic consumption. Since HKTB has decided to stimulate domestic consumption in the first phase of its plan, it should allocate some of the resources to support the industry in promoting local tours.

 

At present, business is bleak for quite a number of local tourist attractions. For instance, the Ocean Park and Disneyland have been closed for days, and business is bleak for travel agents, hotels, restaurants and the retail sector. HKTB can offer assistance and take the lead in encouraging such sectors as tourist attractions, hotels, restaurants, retail stores and travel agents to jointly launch local tour itineraries with unique characteristics, so as to promote domestic consumption and gain more momentum for recovery. After border closure is lifted overseas and on the Mainland, HKTB may further decide how to proceed to the next stage of work having regard to the actual development of the epidemic, including considering stepping up overseas marketing efforts and raising the proportion of overnight visitors.

 

In the past, HKTB used to allocate most of its resources to advertising and publicity. In recent years, it has also begun to grant subsidies to the industry in the form of financial support and incentives instead. Facing this grim situation, HKTB should increase subsidies for the industry and particularly, take on most of the costs incurred from external promotion. Increasing the relevant subsidies will definitely serve to make industry participants with financial difficulties more proactive in external promotion of tourism products. When doing promotion, industry participants with networking connections can reach different customers on a more extensive basis with more diverse products launched, which will be better than relying solely on advertising and publicity. It will be more conducive to the recovery of our tourism industry in the future.

 

President, the relief measures costing $120 billion introduced in this year's Budget and the two rounds of AEF have totalled $290 billion, equivalent to 10% of the Gross Domestic Product ("GDP"). The deficit is estimated to be as high as $139.1 billion next year, equivalent to 4.8% of GDP, going beyond the international standard of 3% of GDP and breaking with the philosophy of public finance management to keep the expenditure within the limits of revenues. Nevertheless, we can see that facing a once-in-a-century epidemic, countries around the world have all introduced various forms of relief measures, and I do not think Hong Kong should be an exception.

 

I notice that the measures rolled out by the Government so far are actually similar to those of other countries. Hong Kong's reserves will drop from the level of $1,100 billion to approximately between $800 billion and $900 billion in the future. Fiscal reserves should still be in a healthy state. But if the epidemic shows no sign of abating despite the relief packages and a third round of relief measures is necessary, people will inevitably be worried that the reserves of Hong Kong are not enough. For this reason, the Government should prepare for recovery from now on, and examine proper ways for resumption of work and school after the epidemic, and ways of restoring external connections and economic activities to make the market more vibrant.

 

Meanwhile, the Government should also study the circumstances under which Hong Kong may consider reopening in phases cross-boundary transport links with neighbouring regions and countries where the epidemic is relatively more under control, lifting entry and exit restrictions and gradually resuming normal activities on the premise of protecting public health. I believe it is the collective wish of members of the public and various sectors and industries. For instance, we see that the epidemic is more under control in Macao than Hong Kong, and the epidemic in Hong Kong will probably come under control soon. Under such circumstances, can we consider resuming traffic between both places?

 

President, Hong Kong can be described as facing the double whammy of the disturbances arising from the opposition to the proposed legislative amendments lasting as long as six months and the once-in-a-century global outbreak of pandemic. Internal depletion has ruined our home, Hong Kong. The wind and rain out there have been shaking our foundation. To protect Hong Kong, our home, Hongkongers need to stand together in solidarity, waiting for sunshine after the rain. Only then can Hongkongers live and work in peace and contentment. But with endless internal depletion, even if the epidemic is over, the unlawful and violent protesters will come back stronger. The opposition camp will continue on the path that leads to mutual destruction politically, economically and socially. Hong Kong will never have a moment of peace, and people's life will not be protected.

 

A host of relief measures have been presented in this Budget, including a universal cash payout of $10,000. I call on Members from the opposition camp not to obstruct the passage of the Budget for their own political agenda and affect the well-being of the general public. In view of the business doldrums experienced by many trades and a record high unemployment rate, the SAR Government should also listen to voices from all sides, spare no effort in launching more measures, and help various sectors and members of the public in Hong Kong weather the storm.

 

President, I so submit.