HONG KONG - The government will roll out a relief package worth HK$137.5 billion (S$25.3 billion) to protect jobs and businesses, even as it extends current social distancing measures and orders mandatory Covid-19 tests for all those who can enter the city.

The bulk of the package, or HK$80 billion, will be used to pay 50 per cent of workers' salaries for six months, with the subsidy for each worker capped at HK$9,000. This is expected to help 1.5 million workers receive some wages.

Chief Executive Carrie Lam on Wednesday (April 8) said at a briefing that firms will be reimbursed in two instalments, the first by June.

"After we spend the money, we can earn it back because Hong Kong's fundamentals are good. I'm confident we can get through this. We need to be united to fight the epidemic," she said.

She added that the government will create 30,000 short-term jobs over a 12-month period and hire 10,000 more civil servants in the next year or so.

Some one million taxpayers will also be allowed to defer paying their bills for three months if they wish, while MTR fares will be 20 per cent cheaper, with the government bearing half the loss.

The Hong Kong leader added that she and the 16 ministers had voluntarily agreed to a 10 per cent pay cut. This would bring her monthly salary to HK$390,000 from last July's HK$434,000.

"We want to show we are going through this difficult time with the people," said Mrs Lam. "It's not a response to a certain political situation or request from anyone."

She said the pay cut was not added in the past two or three days but had been included when the government started working on this third package.

In February, the government said Mrs Lam and her Cabinet members would each donate a month's salary to the Community Chest to show solidarity with the public amid the slowing economy.

Last week, the Hong Kong leader came under fire after it was revealed that she would get an extra HK$120,000 in pay this financial year, with her annual salary hitting HK$5.21 million.

The new relief package, which is about 4.6 per cent of the city's gross domestic product (GDP), along with other relief measures, would cost the government a total of HK$287.5 billion.

This would lead to a spike in the budget deficit to HK$276.6 billion from HK$139.1 billion this financial year, which is equivalent to 9.5 per cent of GDP.

The new package dwarfs a HK$30 billion fund announced in February that included 24 initiatives to help struggling sectors.

The Secretary for Food and Health, Dr Sophia Chan, on Wednesday morning said she has issued an order through the government gazette for existing restrictions to be extended till April 23.

Previously, the government had announced the closure of various leisure venues, including ice rinks, gaming arcades, cinemas and gyms. This was later extended to include mahjong parlours, karaoke lounges and nightclubs.

Now, beauty salons and massage parlours have been added to the list and will be shut till April 23.

Currently, eateries have to halve their capacity and have tables spaced at least 1.5 metres apart from each other.

The government has also prohibited gatherings of more than four people.

These restrictions will be extended to April 23 as well.

The Department of Health said on Tuesday it would strengthen health quarantine and Covid-19 testing arrangements for all inbound travellers from Wednesday.

All asymptomatic inbound travellers arriving at the Hong Kong International Airport have to go for mandatory tests at the Department of Health's temporary specimen collection centre at the Asia World Expo before they undergo their compulsory home quarantine.

"As 248 cases (69.1 per cent) of the 359 imported cases recorded in the past 14 days (March 25 to April 7) involved people who had been to the United Kingdom, the Department of Health has decided to adopt the same testing arrangement for inbound travellers from the UK after assessing venue restrictions and relevant infection control risks," the government said.

From Thursday onwards, people arriving on flights from the UK are required to get tested too and will have to wait at Asia World Expo for the test results.

Those who return from China's Hubei province via land crossings will be given a test kit to collect samples at home from Wednesday.

The latest moves come as the number of local confirmed cases on Wednesday hit 960, more than double the 387 confirmed cases a fortnight ago. Many of the cases are local transmissions.