"Policy on unemployment loan" (2021/06/16)

"Policy on unemployment loan" (2021/06/16)

MR YIU SI-WING (in Cantonese):

Deputy President, in a normal economic climate in the past, Hong Kong's unemployment rate was fairly low, staying at around 3% for a long time, which is almost full employment. For this reason, the Government does not provide regular assistance for the unemployed under the welfare system, the target of which is mainly those earning low or unstable income. For this reason, the general public in Hong Kong have the habit of saving for a rainy day, and many financial advisors would remind wage earners to have at least six to nine months of emergency reserve to meet their living expenses in case of unemployment. Therefore, most of the unemployed can meet their living expenses with their own savings or support from their families while trying to find a new job. As long as they do not demand too much, generally they should be able to secure a job within a short period of time.


However, given the ferocious onset of COVID-19 and its persistence for almost a year and a half to date, many wage earners who lost their jobs have already exhausted their reserve and supplies. In response, the Government has provided six months' unemployment assistance under the Comprehensive Social Security Assistance ("CSSA") Scheme. Since June last year, the CSSA asset limits for able-bodied persons have been further relaxed by 100% for one year. Up to April this year, in less than a year's time, the number of applications has increased to more than 19 000, up 57% compared with that before the epidemic in January 2020. The figures reflect that the unemployed are facing increasingly serious livelihood difficulties.


Deputy President, owing to the epidemic, Hong Kong's economy was badly hit last year. Even though this year some industries have started to recover and the overall unemployment rate has gradually fallen, many industries have not yet seen an upturn and the unemployment rate has remained high. The unemployment rate of consumption- and tourism-related sectors combined reached 9.9%, and among them, the unemployment rate of the food and beverage service activities reached 12.1%. Extraordinary times call for extraordinary measures. Many people asked the Government to continue the assistance scheme for supporting enterprises and safeguarding jobs in order to, by way of supporting employers, safeguard employees' livelihood and maintain the competitiveness of industries that have come under pressure. Regrettably, the Government has so far had no intention to relaunch the scheme for supporting enterprises and safeguarding jobs. The Government only introduced the 100% Personal Loan Guarantee Scheme on 28 April this year with an application period of only six months, offering one more financing option to the unemployed. It is originally a good thing but the duration is indeed too short as application will close on 27 October. Therefore, I agree with Mr POON Siu-ping's proposal to ask the Government to continue the 100% Personal Loan Guarantee Scheme to help alleviate the financial pressure of the unemployed.


In the long run, rightly as stated in the original motion, the Government should have in place a sustainable policy on unemployment loan. In times of economic recession with a persistently high unemployment rate, say, if the current unemployment rate of 6% persists, the Government can immediately activate the loan guarantee scheme without undergoing again cumbersome approval procedures. Moreover, the Government can also consider suitably increasing the maximum amount of unemployment loan, i.e. $80,000. To prevent abuse, the balance of an applicant's MPF account can be used as guarantee for the excess amount. If the applicant fails to settle repayment on time, a certain sum can be deducted from his or her MPF account on a pro-rata basis. In this way, the applicant can increase his or her loan amount to alleviate the financial pressure without putting the Government's finances at risk.


Deputy President, Mr LUK Chung-hung's amendment which proposes immediate provision of a cash allowance for unemployment and suspension of work is well-intentioned but I am worried about the risk of it being abused. I will abstain from voting. Mr Vincent CHENG's amendment calls for a comprehensive unemployment assistance and protection system, which I consider more viable, and so I will vote in favour of it.


Deputy President, I so submit.