Wage Subsidies for Coupons? What a Deal

Lam announced more money will be doled out to keep the economy going

This morning Hong Kong leader Carrie Lam Cheng Yuet-ngor announced there will be a third round of financial aid for businesses adversely affected by the coronavirus pandemic -- including supermarket chains like ParknShop and Wellcome.

So far Lam said HK$290 billion has been doled out and resulted in the economy boosting by 5 percentage points.

The second round of the wage subsidy scheme of HK$81 billion will be available August 31 and last from September to November.

But why are these two supermarket giants eligible for the wage subsidy scheme?

ParknShop says prices have gone up because of the pandemic

Jardine Matheson-owned Dairy Farm operates supermarkets like Wellcome and Marketplace, as well as convenience stores like 7-Eleven, Mannings and Ikea. Dairy Farm received HK$399 million in the first round of the wage subsidy scheme, while ParknShop and Watson's got HK$161 million, both owned by AS Watson, controlled by Li Ka-shing's CK Hutchison Holdings.

AS Watson has about 260 supermarkets, and Dairy Farm has over 200 in Hong Kong.

When Lam announced the two supermarket chains were eligible for the scheme, eyebrows went up, but she quickly added a caveat.

"During the past few months, supermarkets generally saw sales remain the same or did even a little bit better," she said. "I will demand two supermarket chains -- ParknShop and Wellcome -- offer discounts to the public and cash coupons to the underprivileged in return for receiving wage subsidies."

Wellcome can get subsidies in return for helping the poor

There is no way the supermarkets are only making the same or just a bit better -- with restaurants forced to shut at 6pm, the vast majority of Hongkongers are making dinner at home. And where do they buy it? In the supermarket!

Most people are spending more of their money on food these days, even if it's just buying milk, pasta and rice, and the numbers show it.

In June, supermarket sales rose 4.5 percent compared to last year, a 7.3 percent increase in May, 16.1 percent in March, and 11.1 percent in February and January combined. Surely these are decent steady increases when other sectors are "swatting flies"?

But perhaps most galling is the government demanding the supermarkets give out discounts in return for wage subsidies. How about not making these companies eligible for these subsidies since they are doing a brisk business every month? Why create more bureaucracy in adding this condition? Why not give that money to smaller companies that desperately need to stay afloat in the next few months?

Cheng questions subsidy to supermarkets

Even the pro-Beijing DAB or Democratic Alliance for the Betterment and Progress of Hong Kong wondered how effective it would be for supermarkets to hand out coupons to the disadvantaged. How would that be determined? How much would be given out?

"It's hard to say how much discount is a reasonable discount," said DAB lawmaker Vincent Cheng Wing-shun. "So, what we are suggesting is we put at least half of the resources to the public, not only giving discounts to fulfill this subsidy scheme."

Some careful shoppers noted prices of some goods had gone up. When queried by RTHK about this, ParknShop replied that the wholesale prices of many products, as well as transportation costs had gone up drastically because of the pandemic, but said it would do its best to contain costs and keep prices reasonable.

Labour and Welfare Secretary, Law Chi-kwong had to perform some political gymnastics this afternoon in justifying the supermarket chains in receiving subsidies.

"The employment support scheme is to help the employers to help the community, in particular employment," explained Law.

Law says some companies should give back to the community

"But there are definitely companies who obtained these subsidies, they are not seriously affected. So there is some need for them to... sort of, pay back to the community," he said.

So in return for subsidies that help conglomerates save money from paying part of their employee wages, they can just hand out a bunch of coupons to the underprivileged? What a deal!

Perhaps another hair-brained idea cooked up by Lam and no one in her cabinet dares to point out the inconsistencies and yet they have to defend the measures to the skeptical media and public.

Back to the drawing board?

HK's Noonday Gun

The Noonday Gun wrapped in blue tarp for tomorrow...

After weeks of rain -- and very hard at times -- it was a shock to see blue skies today. In the morning the Hong Kong Observatory warned there would be showers and I dutifully packed a small umbrella, but it was hardly necessary.

Fantastic blue skies and looking over onto a construction site

Following lunch with YTSL consisting of ramen, gyoza, tofu and beer in Causeway Bay, we checked out the path to the Noonday Gun, in front of The Excelsior Hong Kong.

There's a sign at the parkade that instructs visitors where to go: down some stairs and along a hallway that's also occupied by large green pipes that seem to be carrying seawater for the hotel... for flushing toilets perhaps?

In any event on the other side we found the Noonday Gun wrapped up in a tarp and a fantastic view of blue skies and white fluffy clouds.

The firing of the Noonday Gun is done by Jardine Matheson and the reason why is as follows:

Green tanks carrying seawater along the path

While the land is owned by Jardine's, in the 1860s its private militia would fire a gun salute to welcome a Jardine taipan's arrival by sea.

A senior British naval officer was new to Hong Kong and unfamiliar with the practice and found this annoying, as such salutes were only reserved for government officials and senior officers of the armed services.

As a penalty, Jardine's was ordered to fire the gun every day at noon, in perpetuity.

There was an interruption of firing the gun during the Japanese occupation from 1941 when the Japanese dismantled the gun and was subsequently lost. After the British regained Hong Kong in 1945, the Royal Navy gave Jardine a new six-pound gun and then two years later it was back in operation.

However, the geography in this area is literally changing with several construction cranes poking through the sky working on an underground freeway from Central.

A panoramic shot of the area

They've been there for a while and we imagine will be there for some time yet... The only constant in Hong Kong is change...