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Written by: Commentary Editing Room
2021-02-23 17:30
Last update date: 2021-02-23 17:30
It is reported that the government's budget released on Wednesday (24th) will announce the establishment of unemployment loans to relieve the financial pressure of the unemployed.
This idea may help the public to tide over the temporary difficulties, but it cannot solve the financial pressure of the grassroots.
If officials only want to use this to replace the unemployment assistance policy, it will only disappoint people.
According to reports, applicants for unemployment loans must declare that they have been unemployed for a period of time, and this should be proved by tax bills or bank account records.
The loan limit is six times the monthly salary or 80,000 yuan when working, whichever is lower, and the annual interest is 1%.
Applicants only need to repay the interest for the first 12 months, and the repayment period is up to five years. If the payment is made on schedule, the interest will be refunded.
The loan is approved by the bank, 100% guaranteed by the government, and the commitment is 10 billion yuan.
The government hopes that the economy will recover after the epidemic, and the unemployed will be able to find jobs again. Even if their finances are tight during the unemployed period, they do not have to patronize financial companies and suffer high interest rates.
Borrow, not borrow, get back
The government may think that the loan program is killing two birds with one stone. Applicants can survive economic adversity with emergency money. The government can also respond to the demand for government support for the unemployed and recover this expenditure in the future.
But even if the repayment period is as long as five years or even interest-free eventually, the loan is a loan and the applicant must always pay it off.
Assuming that 80,000 yuan is borrowed and the loan is paid off within five years, the public will have to repay 1,730 yuan every month from the 13th month at the latest. The amount is about 9% of the median monthly employment income in 2020. The ratio is actually not light.
If borrowers are not sure that they will be able to find a job and have a sufficient salary in a year, they may be deterred from loan plans.
Recently announced the latest unemployment rate of 7%. Some experts believe that the unemployment rate has not yet peaked. The government also warned that the unemployment rate is slow to fall and it is difficult to fall to 5% within three years.
That being the case, workers will naturally worry about being unemployed for a long time even if they work hard to find a job.
If you want to start paying back your principal before you find a job, your life will be even worse.
The grassroots and low-skilled workers may retreat and prefer to squeeze rather than borrow rashly.
There are reports that the unemployment loan measures under the epidemic are not new in Hong Kong, but also in Japan.
However, the Japanese government's "Comprehensive Support Fund Program" stipulates that applicants from non-resident taxable households can be exempt from repayment if their income continues to decrease when repaying the loan.
This arrangement can better take into account the worries of the grassroots and low-skilled workers, and reduce their financial pressure.
Lin Juntong, director of the Low-income Alliance Concerning CSSA, pointed out that unemployment assistance can be set to encourage employment.
(Photo by Kong Fanxu)
Job creation and unemployment assistance are fundamental
For citizens, the most important thing is employment opportunities.
If the government launches unemployment loans, it should have adequate policies to create job opportunities and help the unemployed find jobs as soon as possible.
What the government needs to do is to do its utmost to curb the epidemic in the short term, improve various employment training programs such as "Special. Love Value-added", assist workers in changing jobs and upgrade their skills, and even lead the industrial transformation to attract companies to open jobs in Hong Kong.
On the other hand, even if citizens are interested in seeking jobs, it does not mean they can find jobs.
It takes time to always increase employment opportunities, and this also involves Hong Kong’s economic structure.
Therefore, the government should introduce unemployment assistance to help the unemployed meet their urgent needs.
The Secretary for Labor and Welfare Luo Zhiguang, who has repeatedly refused to establish unemployment assistance, is worried that the temporary policy will eventually become "constant."
In fact, this should not be the reason for rejection, but rather the reason for promptly launching unemployment assistance.
The financial pressure faced by grassroots citizens due to unemployment is indeed not only during the epidemic.
As long as there are thresholds for the policy to help people in need in a targeted manner, unemployment assistance should be set up constantly.
The government is willing to spend more than 80 billion yuan to set up a "guarantee job" program that has loopholes everywhere, but it has a lot of excuses when it comes to helping the grassroots. How can this be justified?
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Budget 2021 Budget Unemployment Rate
