At last there are hopeful signs that the SARS virus epidemic has passed its peak here, allowing us to begin the slow climb back to normal life.

This episode has been far more devastating in its effects than any crisis the city has experienced. At its height it threatened to cripple the economy, but the Government's comprehensive package of measures should help to get Hong Kong back on its feet.

The $3.5b loan guarantee scheme will lighten the burden of SMEs in the four worst-hit commercial sectors - retail, tourism, catering and entertainment - because low-interest loans can aid business turnover.

Members of the Hong Kong General Chamber of Commerce who run chain stores welcome the move, because it allows each shop to borrow up to $0.3m for staff salaries at a 2% interest rate, thus freeing their own money for other pressing business purposes.

However, it does not answer every problem. The hotel industry, with high staffing ratios, will probably need extra help, because the $1m ceiling on loans may not be enough to cover a hotel with more than a hundred employees. Nor will the scheme fully assist listed companies because they are less likely to ask shareholders holding 90% or more of equity interest to underwrite the personal guarantees required. These sectors still require support, and the government should consider ways to help them.

Concessions in rates, water and sewerage and effluent charges for one quarter and the waiving of licensing fees for tourism-related businesses, caterers, retailers and others will help to tide business over the rest of the year. The cross-party Legco coalition has been urging similar moves for some time, so we were particularly pleased when the government not only accepted our proposals but made even more generous allowances.

As the public can also enjoy rates, water and sewerage concessions, and taxpayers will receive a partial rebate on salaries tax, we hope to see turnover increase, and consumers filling shops and restaurants to start spending again. The extra money in circulation should benefit everyone.

Hard lessons in crisis management have taught the government the importance of swift and adequate response to avert disaster. Its decision to reduce government rent to its tenants by between 30 to 50% for a quarter is most welcome. I would like to see developers consider taking similar action.

Developers may not be in a position to make the same large cuts as the authorities, but modest reductions for one quarter are just as important to hard-pressed families and companies. I am contacting the Bank Association of Hong Kong to persuade banks to help borrowers including landlords who have financial problems. I have also discussed with the Hong Kong Monetary Authority about whether it can issue a guideline to advise the banks to adopt some relief arrangement towards the borrowers who have short-term cash flow problems as a result of SARS. Those measures may include allowing the borrowers to pay interest only and not principal for a period of time.

In addition, the Liberal party calls for the temporary reduction in MPF contributions to 2% for one year, to leave more money in the hands of employers and employees. So far, the government will not agree, but I urge officials to reconsider, because that would keep an estimated $10 billion in the HK market, making a positive impact on the economy at a crucial time.

When the party surveyed 1400 interviewees, 66% agreed that a temporary suspension would be an effective measure for both individuals and commercial concerns. Only 14% disagreed. Admittedly, suspension could hit financial companies and banks doing MPF business, but I believe most could absorb a reduction in contributions for at least a year. In fact, reaction from over 370 companies in the HK General Chamber of Commerce, showed that 62 per cent agreed to a change of MPF contributions from 5% to 2% for a twelve-month period

Of course the government's first priority must be to keep the economy on track. It cannot lose sight of the need to maintain a fiscal balance and restore the city's depleted resources. Right now, however, the important thing is to stop the spread of the disease. The fight continues.

Many firms have closed, due to its economic side effects. The jobless rate is expected to exceed 8 per cent. If the combined efforts of our medical scientists in controlling SARS, and the government's relief measures to protect our economy are not wholly successful, the situation could worsen.

But we must not become despondent. Hong Kong has weathered severe tests since 1998, yet it has not all been a negative experience. Even the darkest episodes can have a positive outcome.

The city won unstinting praise from the WHO for handling the bird flu outbreak in a way that averted a pandemic. It is now applauded by world medical authorities for the rapid detection work that traced the source of the infection, increasing prospects for an early vaccine.

Each of us has a part to play in making Hong Kong the most hygienic, health conscious, litter free city in the world. Then we can present ourselves to international tourists, foreign investors and multinationals as a healthy, environmentally pleasant and safe place to visit.

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