In the past years, whenever the upcoming budget was discussed, many observers, commentators and politicians would demand that the government use part of its vast reserves to hand out one-time cash payments to Hong Kong residents to alleviate poverty. The government response has consistently been that Hong Kong’s vast fiscal reserves must be saved for the proverbial “rainy day”.

This year is vastly different. The economy has been severely hit by the three-pronged attack of the months-long disruptive and violent protests by the blackshirts, the Sino-US trade war which impacted on many Hong Kong businesses, and last, but certainly not least, the coronavirus. This lethal combination has severely hurt our economy: Visitors to Hong Kong have dropped from a high of 200,000 per day in February 2019 to less than 3,000 today. This has been a nightmare scenario not only for the hospitality industry, but across the broad spectrum of our tourism industry. Hotel occupancy rates are now in single digits, dragging down related businesses such as bars and restaurants, retail shops, and suppliers to all of the above. Even Ocean Park and Disneyland have had to close. This pain has spread to movie theaters and other entertainment venues, and landlords, as their tenants, will struggle to pay the monthly rents. Taxi drivers are seeing passenger numbers fall; most notably, the longer-distance rides to and from the airport have more or less disappeared.

These measures are important to help our society as a whole survive this unprecedented crisis. Timing is of the essence and it is therefore important that this budget be approved as soon as possible so implementation can occur quickly, and the benefits can be felt by all

Other sectors are also feeling the pain. Initial public offerings have been canceled or put on hold, as have mergers and acquisitions. Not only the bankers, but also the lawyers, accountants, and other related consultant specialists are all seeing a significant drop in activity and earnings. This is already leading to the inevitable restructuring activity in large multinational firms, resulting in unpaid leave and even layoffs for their employees. The unemployment rate in our city is naturally creeping up, presently at 3.4 percent, the highest in three years, and undoubtedly this number will continue to rise. In the aforementioned food and beverage sector, it is now the highest in eight years at 6.1 percent.

The rainy day repeatedly warned about in the past has arrived! And it’s not just any downpour. It is black rain! Or as the financial secretary, Paul Chan Mo-po, put in bluntly, we have entered a “harsh winter”.

It is, therefore, wholly appropriate for the financial secretary to take extraordinary measures in these extraordinary times to keep our economy afloat and to give our people hope by dipping into our vast fiscal reserves of HK$1.13 trillion (US$145 billion). The FS accepts that Hong Kong will have a budget deficit, climbing from 1.3 percent of GDP for the current financial year to 4.8 percent next financial year. This deficit might very well be even higher at the end of the day, as the government revenue forecast for 2020-21 being higher than 2019-20 seems unrealistic in view of the coronavirus’s still expanding harm.

In addition to the previously announced HK$30 billion Anti-epidemic Fund, the focus now is on helping small and medium-sized enterprises through a combination of fee waivers, profit tax reductions, and 100 percent government-guaranteed loans (capped at HK$2 million per loan) to enable wages and rents to be paid. These welcome relief measures together cost HK$18.3 billion. Sadly, they might come too late for some SMEs.

For permanent residents there will be a one-time cash handout of HK$10,000. This is intended to both assist ordinary citizens navigate the tough times and stimulate the economy, if they were to spend it as intended. If, however, substantial parts of this vast amount given to 7 million citizens ends up in saving accounts rather than being spent, it will have been a wasted opportunity.

The key here is that the government manages a flawless and timely logistical implementation of this handout, in close conjunction with the banks.

The initiatives to help ordinary residents, including the cash handout, will cost the government over HK$109 billion — a very substantial but necessary amount.

These measures are important to help our society as a whole survive this unprecedented crisis. Timing is of the essence and it is therefore important that this budget be approved as soon as possible so implementation can occur quickly, and the benefits can be felt by all.

It is therefore a great shame that some political parties and legislators have chosen to focus their attention on one single element in this budget; namely, the proposal to fund an increase in the number of men and women serving in our Hong Kong Police Force. The proposal represents only a 3.1 percent increase in the budget compared to the actual amount used in the current year. The last seven months of violent civil unrest have shown that the Hong Kong Police Force can at times be stretched too thin when simultaneous acts of vandalism and violence erupt in our city. Taking into account rest periods, leave, and injuries, it was clear that the 7,000 or so police officers that can be deployed on the street at any one time are not enough. The police force even had to seek reinforcements from other disciplined services such as the Hong Kong Correctional Services, which should not have been the case.

It was of course no coincidence that during the most serious period of unrest, when our police force was being stretched to the utmost, Hong Kong also saw an unprecedented surge of robberies of jewelry stores.

It is therefore in the best interests of our society and the well-being of all that we return to stability, paving the way for our economic revival, and facilitate dialogue to sort out our differences in a peaceful, civilized and intelligent manner.

May this commendable budget be passed and implemented as soon as possible!

The author is a specialist in international public law, and an adviser on China-related matters to both the private and public sectors. He has lived in Hong Kong for over 18 years. 

The views do not necessarily reflect those of China Daily.