Hong Kong Government to Seek $3 Billion to Fight Virus Outbreak

(Bloomberg) -- Hong Kong’s government will seek approval from the territory’s legislature for at least HK$25 billion ($3.2 billion) in fresh funding to reduce the impact of the coronavirus outbreak in the city, Chief Executive Carrie Lam said.

The amount includes measures to assist tour agencies, restaurants and students, as well as extra cash for the Hospital Authority. The government will also subsidize companies to produce face masks locally, Lam said.

The extra spending would almost equal that rolled out since last year in a bid to stem the economic fallout from the city’s political crisis, as it was hit by a series of anti-government protests. While the cash signals more determination from the government, which has faced criticism over its response to the virus, it will still have to be secured from the fractious Legislative Council.

“Yes, this is a pretty large sum of money, but we are facing an almost unprecedented situation,” Lam said at a briefing in Hong Kong Friday. “In an emergency situation, which we are in, I feel that these measures are justified.”

The government has also obtained consent from Walt Disney Co.’s Disneyland resort in the city to use part of its land for quarantine purposes, Secretary for Commerce and Economic Development Edward Yau said at the briefing.

While Lam says the city hasn’t seen widespread coronavirus infections, there have been 56 confirmed cases so far and an increasing number of local ones recently. That puts the city on the frontline of the global effort to stop the disease spreading beyond mainland China.

Economists are revising down their forecasts for Hong Kong’s economic growth in 2020, with the virus worsening the current recession. Tourism has plummeted, with visitor arrivals in February showing just 3,000 people per day arriving -- a decline of almost 99% on the same period a year earlier.

The measures in detail:

• HK$80,000 one-off subsidy to licensed tour agencies and up to HK$200,000 one-off subsidy to eateries
• The 2019-20 subsidy to each non-tertiary student will be raised by HK$1,000 to HK$3,500
• One-off payment of average HK$5,000 to low-income families
• Hong Kong will review whether to extend the government property rent concession
• The Hospital Authority to receive an extra HK$4.7 billion

Lam called on lawmakers not to block the proposals.

“I would very much hope that members of the Legislative Council will not bargain with us and accept that these measures are essential given the situation,” she said.

To contact the reporter on this story: Natalie Lung in Hong Kong at flung6@bloomberg.net

To contact the editors responsible for this story: Jeffrey Black at jblack25@bloomberg.net, Paul Gordon

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