Roll out offers or lose subsidies

Two leading supermarkets will need to offer discounts to customers in exchange for government subsidies as the administration announced details of a new round of the Employment Support Scheme yesterday.

The second round will accept applications from August 31 to September 13, covering wages from September to November.

Like the first round, business owners can receive half of their workers' wages with a subsidy for each capped at HK$9,000.

The new terms address concerns that sectors like supermarkets and property management firms received subsidies although they were scarcely affected by the Covid-19 pandemic.

Wellcome and ParknShop will have to provide discounts to customers, including low-income people, if they want the subsidy, while property management companies have to give back at least 80 percent of the subsidy to property owners or owners' corporations.

The parent company of Wellcome, Dairy Farm, received HK$399 million in the first round of wage subsidies for its 20,000 staff, while ParknShop got HK$161 million for its 8,215 employees.

At a press briefing yesterday, the Secretary for Labour and Welfare, Law Chi-kwong, said some people felt the government should not give subsidies to large enterprises. But he said many workers will be affected, as these major chains employ thousands, if they are not covered.

"The supermarket chains received more than HK$100 million of subsidy in the first round, and some of these big estate management companies employ more than 1,000 employees and the subsidies were very substantial, well over HK$35 million in the first round," Law said.

"We think that it's sufficient and it's manageable for us, without affecting the overall implementation of the scheme, to try to make it fairer to the community," he said.

"There are definitely companies who obtained these subsidies even though they are not seriously affected by the pandemic. So there is a need for them to pay back to the community. So we designed some very special procedures for these two sectors," Law said.

Details have yet to be discussed with Wellcome and ParknShop on discounts, he said, adding the proposals from the two giants have to satisfy the government.

Law said he expects a "creative" proposal from the supermarket chains.

Asked if discounts will attract people to shop only at the two supermarkets, Law believed that other grocery stores will also need to think about how to maintain their attractiveness and benefit citizens.

"It would be a win-win situation and the government does not mind that. Citizens will also benefit so I can't see there's a problem," he said.

For large-scale estate management companies, the subsidies can be given back to owners or owners' corporations by waiving management fees or saving the money for future expenses.

Law said the companies will have to report to the government on how the subsidy will be shared after discussion with the business owners.

Meanwhile, support for elderly workers will be enhanced in the second round of the scheme.

Law said the government will offer a monthly HK$5,000 subsidy to employees aged 65 or above, as long as the worker has a Mandatory Provident Fund account.

The subsidy will be given to the employers before passing it on to the workers. Even if half of the workers earn less than HK$5,000, they can still get the subsidy, but all of the money would be paid to the employee.

Betty Fung Ching Suk-yee, head of the Policy Innovation and Coordination Office, said most eligibility of the scheme will remain unchanged.

But she said employers who applied in the first round of the scheme have to select the "specified month" again from December last year to March, to calculate the wage subsidies.

Two new criteria for penalizing bosses were also announced.

If the employer has applied for the first round of wage subsidies but is found to have laid off a lot of employees and is not going to hire people again or cannot provide a reasonable explanation, authorities can reject the employer's application for the second round, or they can take back part or all of the second round wage subsidies.

Even if the employers did not sack any employee but if they were found to be acting against the goal of the employment support scheme or public interest, such as asking their employees to take no-pay leave for a long term, authorities can also reject their applications and take back their subsidies.

In response to the government's plan, ParknShop said the purchase and shipping costs of imported products have increased due to the pandemic, market conditions and the internal needs of the supplying countries.

"But bearing in mind the principle of 'customer focus,' ParknShop has been trying to absorb some of these inflationary increases, while ensuring sufficient supplies of daily necessities to our customers at competitive prices and mindful of the special needs of the less privileged," the supermarket said.

Meanwhile, the property management sector believed management fees will be reduced by one or two months.

The president of the Hong Kong Association of Property Management Companies, Johnnie Chan Chi-kau, said there are about 20 large-scale estate management firms in the city and they could be willing to give back the subsidies to flat owners.

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