Relief measures to counter the economic effects of atypical pneumonia are one-off, while those for tackling the budget deficit are mid-term, Financial Secretary Antony Leung told the Legislative Council today.

Mr Leung stressed that both types of measures are equally important, and have to be implemented simultaneously.

In a paper presented to legislators, the Government said relief measures to counter the economic effects of the atypical pneumonia outbreak should lift GDP by at least 0.09% this year.

It estimated that the various revenue measures in the package taken together will have a lifting effect on GDP, with the rise mostly visible in the second half of the year and early 2004.

The expenditure measures, inclusive of employment creation and disease control expenditure, but not including the Government-guaranteed loan scheme, are estimated to lift GDP in 2003 by around 0.15%, with some small lingering effect at the beginning of 2004.

The paper said that for the two types of measures combined, the lifting impact on GDP in 2003 could amount to around 0.24%.

The value of the package of measures amounts to $11.8 billion, of which $11.7 billion will be borne by the Government. 

Of this sum, $5.3 billion is the estimated loss to Government revenue and $6.4 billion is the estimated increase in expenditure.

Mr Leung said taxpayers will enjoy a partial rebate of their salaries tax for 2001-02, 50% of the second tax payment or a maximum of $3,000. This will cost the Government $2.3 billion. He said about 1.3 million people will benefit from this measure.

Under the package of measures, the Government will waive rates payments for 380,000 non-domestic properties with a cap at $5,000, and for 2.34 million domestic properties with a cap at $1,250 for the July to September quarter.

For water charges, there will be a maximum waiver of $267 and $2,133 for domestic and non-domestic users respectively. The sewage charges for domestic users will be capped at $67, and $533 for commercial users. The trade effluent surcharge will be capped at 60%.

There will also be a waiver of licensing fees at a total cost of $276 million for one year.

The paper said the amounts to be received by households or individuals may not necessarily be spent to the same extent or on the same timing as with revenue concessions made under more normal circumstances.

The amounts to be received by business establishments are expected to be mainly for keeping the business entity going, rather than for making any new investment that gives a lifting effect.

Meanwhile, a $3.5 billion loan scheme will render some bridging finance to business establishments against the likelihood of closures or lay-offs, and its impact on the GDP is not assessed.

Under the scheme, operators of four mostly affected industries, namely retail, tourism, entertainment and catering, will be eligible to apply for low-interest loans from May 2 to pay their staff salaries for three months.

It is estimated about 100,000 employers, on an average monthly salary of $10,000, would benefit from the scheme. 

Meanwhile, the Employees Retraining Board will provide special two-month tailor-made skills enhancement training for 8,000 to 10,000 unemployed workers previously engaged in the catering, retail and tourism sectors to upgrade their skills.

There will be 2,500 temporary environmental hygiene workers who will provide free cleaning service to needy elderly people for three months.