President, last month, Chief Executive John LEE delivered the second Policy Address of his tenure. While some people have described it as seeking to “withdraw the harsh measures for the property market and boost the birth rate”, I think it is truly a masterpiece of driving “A Vibrant Economy for a Caring Community”, which is worthy of our support. Today, I would like to discuss the Policy Address from the following aspects to illustrate how it can prescribe the right remedy to the problem.

First of all, I am delighted to see that a number of measures have been put in place to support small and medium enterprises (“SMEs”) in coping with challenges. In particular, I would like to talk about the new repayment arrangements under the SME Financing Guarantee Scheme. Beneficiary merchants were originally required to start repaying the interest and principal from September this year. However, due to the slower-than-expected post-epidemic economic recovery, the industry has been facing cash flow difficulties. The Liberal Party and I have proposed to the Government that the repayment period be extended from 10 years to 20 years. This time, I am pleased to see that the Policy Address has proposed a more flexible repayment arrangement, which allows merchants to repay the principal in a flexible and phased manner over the 10-year repayment period according to their cash flow situation. For example, if a merchant has to repay the principal of $10 million to the Government over a period of 10 years, the pro rata calculation would result in an annual repayment of $1 million. However, at present, taking into account the cash flow situation, the repayment of the principal can be 10%, 20% or 50% of the $1 million in the first, second or third year of the repayment period. As business conditions improve, the principal repayment amount can be increased as long as the total amount is repaid within the 10-year time frame. This provides the industry with more choices and time to gradually switch to normal repayment. The Chief Executive’s approach is more flexible, adaptable and proactive than that proposed by the Liberal Party. Both the Liberal Party and I hope that merchants will make greater efforts to improve their business performance and profitability, with a view to repaying their loans as soon as possible.