Govt to launch job aid scheme

March 18, 2022

Chief Executive Carrie Lam: 
 
This scheme (Employment Support Scheme) is intended to support employees through providing wage subsidies to their employers. 
 
So we would not draw a distinction between the resident’s status, ethnicity or background of the individuals.  
 
As I have mentioned, the distinction will be drawn on the basis of the industry. So for certain business sectors, which are not adversely affected by the COVID-19 epidemic, they will not be eligible. 
 
Secretary for Labour & Welfare Dr Law Chi-kwong: 
 
Just to recap, in the 2020 ESS (Employment Support Scheme), it covered the period of June to November 2020. 
 
You probably remember the third wave (of the local COVID-19 outbreak) peaked (between) July and August in 2020. 
 
Very likely because of the ESS, the unemployment (rate) was rather stable at that time - at around 6.1% to 6.3% - even though the peak of the third wave had hit Hong Kong. 
 
After the end of the third wave, the fourth wave came at around mid-November 2020. 
 
The ESS stopped in November 2020. Then, the unemployment rate started to increase in December 2020 and (then) it peaked, by the time it reached February 2021, at 7.2%. 
 
The whole purpose of the ESS, back at that time, was to try to keep businesses afloat, so that when the epidemic subsided, the industry could revive very quickly. 
 
If you look at the figures, it clearly illustrates how quickly the economy picked up in 2021. 
 
As the Chief Executive just mentioned, in the announced figures in February 2021, the unemployment rate was 7.2%. In ten months’ time, it dropped to 3.9%. 

The best comparison is back in 2003 during the period of SARS (Severe Acute Respiratory Syndrome) (outbreak).
 
In June 2003, the unemployment rate was 8.5%. To reduce it by 3.3% - the same magnitude that we had in 2021 - it took two and a half years before the unemployment rate dropped down to 5.9%. 
 
What this really tells us, is that the rebound in 2021 was very quick. And if we look at the impact of the ESS during the third wave and how much businesses upheld themselves and how they recovered very quickly after the fourth wave, it illustrated the importance of an ESS. 
 
But (I would) just highlight that the current proposed ESS is slightly different because of the timing. 
 
If you remember in 2020 when we started announcing the ESS, it was right after the second wave, before the third wave - we did not know when the third wave would come. So the whole idea (was) to keep businesses afloat. 
 
But now it is slightly different. Now - if anything we can say touch wood - if the peak of the fifth wave has already passed more than a week ago, now is the time to think about how we can help businesses (to recover) as quickly as possible. 
 
So the design, spelled out by the Chief Executive right now, is to encourage them to increase their employment because the amount of subsidy (granted) will depend on how many employees they will employ and that will help businesses to rebound far more quickly.

(To watch the full press conference with sign language interpretation, click here.)

The Government will launch a new round of the Employment Support Scheme (ESS) to provide time-limited financial support to employers to retain their employees who would otherwise be made redundant.

Announcing details of the 2022 ESS at a press conference this morning, Chief Executive Carrie Lam said compared to the first round that was introduced in 2020, this particular scheme will be more focused on helping small and medium-sized enterprises.

“This scheme is intended to support employees through providing wage subsidies to their employers.

“So we would not draw a distinction between the resident’s status, ethnicity or background of the individuals.

"As I have mentioned, the distinction will be drawn on the basis of the industry. So for certain business sectors, which are not adversely affected by the COVID-19 epidemic, they will not be eligible.”

Mrs Lam said the Government will work on the details of the scheme and targets to invite applications in April.

Secretary for Labour & Welfare Dr Law Chi-kwong took reference to the experience under the first round of the ESS to explain why he believes the scheme can quickly help revive businesses in Hong Kong once the latest wave of the COVID-19 epidemic subsides.

“Just to recap, in the 2020 ESS, it covered the period of June to November 2020.

“You probably remember the third wave of the local COVID-19 outbreak peaked between July and August in 2020.

“Very likely because of the ESS, the unemployment rate was rather stable at that time - at around 6.1% to 6.3% - even though the peak of the third wave had hit Hong Kong.

“After the end of the third wave, the fourth wave came at around mid-November 2020.

“The ESS stopped in November 2020. Then, the unemployment rate started to increase in December 2020 and then it peaked, by the time it reached February 2021, at 7.2%.

“The whole purpose of the ESS, back at that time, was to try to keep businesses afloat, so that when the epidemic subsided, the industry could revive very quickly.

“If you look at the figures, it clearly illustrates how quickly the economy picked up in 2021.

“As the Chief Executive just mentioned, in the announced figures in February 2021, the unemployment rate was 7.2%. In ten months’ time, it dropped to 3.9%.

“The best comparison is back in 2003 during the period of SARS (Severe Acute Respiratory Syndrome) outbreak.

“In June 2003, the unemployment rate was 8.5%. To reduce it by 3.3% - the same magnitude that we had in 2021 - it took two and a half years before the unemployment rate dropped down to 5.9%.

“What this really tells us, is that the rebound in 2021 was very quick. And if we look at the impact of the ESS during the third wave and how much businesses upheld themselves and how they recovered very quickly after the fourth wave, it illustrated the importance of a ESS.”

Dr Law also pointed out that the 2022 ESS serves a slightly different purpose than the scheme’s first round.

“If you remember in 2020 when we started announcing the ESS, it was right after the second wave, before the third wave - we did not know when the third wave would come. So the whole idea was to keep businesses afloat.

“But now it is slightly different. Now, - if anything we can say touch wood - if the peak of the fifth wave has already passed more than a week ago, now is the time to think about how we can help businesses to recover as quickly as possible.

“So the design, spelled out by the Chief Executive right now, is to encourage them to increase their employment because the amount of subsidy granted will depend on how many employees they will employ and that will help businesses to rebound far more quickly.”