Letters | Why Covid-19 cash has Hong Kong bar owners caught between a rock and a hard place

The promise of government assistance motivated owners to retain staff even after they were forced to shut for months due to the pandemic. However, red tape has made receiving the money a nightmare

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Patrons enjoy a drink at a bar in Tsim Sha Tsui on October 5. Hong Kong bars had been closed for three of the last six months to comply with the government’s pandemic containment measures, before they reopened on September 18. Photo: Edmond So

Published: 7:00am, 26 Oct 2020Updated: 7:00am, 26 Oct 2020

In the second round of the Hong Kong government’s Anti-epidemic Fund measures, it was announced that companies could avail of the Employment Support Scheme or cash assistance. The support scheme works if a company has revenue, as the government assistance covers up to 50 per cent of employee wages, with the subsidy capped at HK$9,000 per month.

But where does the other 50 per cent come from when the government has decided to close your business? In the food and beverage sector, the government has closed bars for three out of the last six months.

Bars were thus offered cash assistance payable for May, June and July, and, in the second tranche, for August, September and October. The offer was reasonable, as a bar of 400 square metres would get HK$900,000 payable in two tranches of HK$450,000 or HK$150,000 per month, with 80 per cent (HK$120,000) allocated to employee wages.

However, accessing this money has been a never-ending nightmare. First, you need to show proof of paying Mandatory Provident Fund, then evidence that the funds have been paid by the company, then evidence that these funds have been paid to employees. This information is then certified each month by a certified public accountant and filed to the government by the 22nd of each month.

One would expect that the funds would then be paid within a reasonable time. However, this is where the black hole begins. The government has decided that the CPA must be audited by the government’s appointed auditor. But with thousands of claims being submitted each month, the paperwork just piles up. The result is that no financial assistance arrives.

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Unlike the Employment Support Scheme, where the government paid out based on Mandatory Provident Fund statements, the cash payment has much more rigorous oversight but without the resources to implement it.