Timely relief for retailers in face of adversity
22 March 2020
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To enhance the capability of the Government and relevant parties in combating COVID-19 and provide relief and assistance to businesses and citizens hard hit by its outbreak or affected by anti-epidemic measures, the Government set up a $30 billion Anti-epidemic Fund (AEF) to introduce 24 measures1 on 21 February. These measures are expected to benefit over 111 000 business establishments, 200 000 families and 1.47 million persons. So far, over 20 measures have been rolled out with almost $5 billion spent.
One of the key measures under the AEF is the Retail Sector Subsidy Scheme (the Scheme) announced in detail last Monday. With local consumption sentiment dampened by the epidemic and the number of inbound travellers suffering from a sharp fall2 owing to our progressively stringent compulsory quarantine measures for visitors in response to the virus spread on the Mainland and overseas countries, the retail sector has been hard hit3 and the business environment has become extremely challenging. The Scheme aims to tide over the retail sector by providing immediate relief and assistance.
The $5.6 billion Scheme is expected to benefit some 70 000 retailers. Each eligible retail store will receive a one-off subsidy of $80,000. The maximum amount of subsidy for a parent company that operates retail groups or chain stores under the same business registration is $3 million (equivalent to no more than 38 stores). Following a month's intensive preparatory work, the Scheme will be open for application starting from tomorrow (23 March) for three weeks until 12 April. The Government has commissioned the Hong Kong Trade Development Council (HKTDC) to assist in implementing the Scheme.
Given that the retail sector is not subject to any regulatory or licensing regime, and that it has diversified modes of operation and great variations in scale, it is no easy task to devise the Scheme and carry it through within a short time. In the past few weeks, my colleagues and I critically examined the Government's economic data and information on relevant business establishments. We contacted and met with stakeholders to gain practical knowledge of their modes of operation in order to finalise the design and coverage of the Scheme.
Taking into account the views of the retail sector and its modes of operation, we decided to adopt a well-established definition of "retail industry" that is widely applied worldwide and locally in official economic and vacancies surveys for the retail sector. Based on this definition, the Scheme would cover retailers that sell tangible goods to the general public for personal or household consumption or utilisation, and no processing or transformation of the goods should be involved in the resale process. Moreover, they must be conducting substantial and substantive retail business at a fixed physical and individually operated store in Hong Kong, with business commenced before 1 January 2020 and still in operation at the time of application.
In view of the diversified modes of operation and the wide variety of goods sold, the Scheme will impose no restrictions on the types of commodities. We will take into full account the documents and other information provided by the applicants in the vetting process, and will cover as many types of retailers as possible.
To expedite the disbursement of subsidy, the Scheme will employ a self-help online application system that will facilitate submission of applications and minimise the time required for vetting. To complete the application process, an eligible retailer simply needs to upload a valid Business Registration Certificate, a recent photograph of the retail store, a copy of a monthly bank statement (within 2020) showing the name of the applicant/company and two other types of recent bills/statements of the retail store (e.g. MPF contribution statement, rental receipt, electricity/water bill). Applications and supporting documents can be submitted through personal computers or smartphones anytime during the three-week application period, sparing the applicants from queuing to avoid crowd build-ups as part of epidemic control. I would like to thank the HKTDC for its co-operation and assistance in setting up the online application system within a short time, arranging for customer enquiry and support services, as well as vetting of documents, so that the Scheme can be rolled out within a month.
The vetting process will be conducted in tandem with the submission of applications during the three-week application period. We aim to disburse the subsidy in batches starting from early April. Depending on the total number of applications received, the whole vetting process is expected to be completed in May.
Besides, there are special application arrangements under the Scheme for retail stores operated by social enterprises. The Hong Kong Council of Social Service will assist in background checks for the issue of certificates and help social enterprises submit applications for their retail stores. Social enterprises in general serve the social purpose of supporting the disadvantaged, including creating employment opportunities for them.
The online application system of the Scheme will commence operation at 9:00 a.m. tomorrow. There is no need for applicants to submit their applications on the first day of the application period as applications are not processed on a first-come-first-served basis. A dedicated hotline (1836 111) and an email address (enquiry@retailsubsidy.hk) have been created for ease of enquiry by retailers.
It is expected that the Scheme will provide timely relief for retailers affected by the epidemic to tide them over this period of adversity.
