Gov't committed to tackling poverty
June 21, 2013
Secretary for Labour & Welfare Matthew CheungAs a generally affluent society, our city has all the necessary prerequisites to provide social protection and satisfy the basic needs of everyone in the community. Therefore, by whatever yardstick, the Hong Kong SAR Government has not dodged and will never shy away from finding the best possible solutions to help the poor.
As a matter of fact, since the swearing-in of the current-term Government, we have left no stones unturned in implementing and proposing various measures to alleviate poverty. For instance, we have reinstated the Commission on Poverty chaired by the Chief Secretary.
To take matters forward, the commission has identified the setting of a poverty line as one of its priorities. The poverty line serves three key functions. First, to quantify the poverty-stricken population for a focused analysis of the situation of various groups living below the poverty line. Second, to thoroughly investigate the causes of poverty and serve as a guiding reference for policy formulation so that poverty alleviation efforts can be more effective. Third, to assess the effectiveness of poverty alleviation policies against changes in the size of the poverty-stricken population.
The poverty line is not meant to be linked directly to the eligibility criteria of various means-tested assistance programmes. It is therefore not a poverty alleviation line. It is a tool for analysis which will enable us to identify and target various groups of people in need, and analyse and monitor the effectiveness of government intervention over time.
In this regard, we will lose no time to explore necessary poverty alleviation measures as soon as practicable to complement the setting of a poverty line.
Poverty alleviation in fact straddles a very wide spectrum of policy areas. As the minister responsible for labour and welfare policy, I would like to take this opportunity to draw your attention to some examples of our latest initiatives and thoughts on the welfare and labour policy fronts. These are also key measures in addressing the needs of our poor population.
Let me start with poverty among our elderly population. Of the total 266,510 cases currently under the Comprehensive Social Security Assistance Scheme, 57.3% of them (152,734) are cases with elderly aged 60 or above.
In addition, our population is fast-ageing. At present, nearly one in every seven people of our 7.1 million population is aged 65 and above. This figure is estimated to rise to 2.56 million in 2041, or one in three of the population.
As for the elderly dependency ratio, at present five persons of working age (people aged 15 to 64) support one dependent elderly person financially. In 20 years' time, this ratio will further drop to just two supporting one dependent elderly person.
Financial support for elderly persons is mainly provided through the CSSA, Old Age Allowance (OAA), Disability Allowance and the recently introduced Old Age Living Allowance (OALA). Nearly 80% of our senior citizens aged 65 or above are at present receiving assistance or allowance of different types under the social security system. The percentage of elderly people aged 70 or above receiving assistance or allowance reaches a hefty 87%.
I would like to draw your particular attention to the new OALA. The new allowance - providing a monthly allowance of $2,200 for each eligible elderly recipient - is an additional financial support measure for the needy elderly not covered by CSSA. We expect the allowance to benefit some 400,000 elderly and improve their livelihood. With a steadily and rapidly ageing population, spending on OALA is bound to increase in the long run.
For those eligible elderly citizens who are now living in Guangdong or who choose to live there, we will make the OAA (currently at $1,135 per month) portable for them. This elderly-friendly and flexible measure, known as the Guangdong Scheme, will come on stream no later than November this year.
Under the scheme, eligible Hong Kong senior citizens who choose to reside in Guangdong will be able to receive a full-year allowance in Guangdong without coming back to Hong Kong every year, as is the current requirement. We estimate that some 30,000 people will benefit initially.
Another inclusive measure with poverty-alleviating impact and much welcomed by our senior citizens is the implementation of the Public Transport Fare Concession Scheme for the Elderly and Eligible Persons with Disability, or what is commonly known as the "$2 Scheme". People aged 65 or above can now get around by MTR, franchised buses and ferries for just $2 per trip. The daily average passenger trips using MTR, buses and ferries under the Scheme is around 660,000 and the estimated expenditure for the Scheme, which is borne by the Government, is around $600 million in 2013-14.
There has been heated debate on whether it is time for Hong Kong to reform our retirement protection and put in place a so-called universal retirement protection. This is a highly controversial and complicated issue as it entails financial commitment on the individual employees, all employers and the Government.
Retirement protection under review
Academics also have different views on its economic impact. Despite the complexities involved, the Commission on Poverty took the very important step in March this year by tasking Professor Nelson Chow of the University of Hong Kong to undertake a comprehensive study on the future direction of retirement protection in Hong Kong.
He will, first of all, examine the viability and sustainability of the current multi-pillar system of retirement protection comprising the social security system, the Mandatory Provident Fund, voluntary private savings and family support.
He will then take full stock of all the views and opinions expressed in the community by various groups and concern groups. Through this holistic approach, the study, which is expected to be completed early next year, seeks to come up with impartial, objective and evidence-based advice for the Commission on Poverty to consider the best way forward and to forge a community consensus.
Sturdy, sustainable safety net
So much for some of our new measures targeting our poor elderly citizens. But one message should be made clear: our priority is to provide a sturdy and sustainable welfare safety net for the needy, the disadvantaged and the underprivileged.
A wide range of preventive, supportive and remedial welfare services are in place to assist and empower the vulnerable. In 2013-14, government recurrent spending on social welfare and women's interests will reach $55.7 billion, accounting for a significant 19.1% of the total recurrent government expenditure of the same year, second only to education.
In comparison with the revised estimate for 2012-13 ($42.7 billion), there is an increase of 30.5%. This reflects our unwavering commitment to improving the livelihood of the disadvantaged.
Yet, the Government is also mindful that the provision of welfare and other public services should not create a sense of dependency among the recipients, sap their motivation for self-help and remove incentives to work. Therefore, how to empower and enhance support for many diligent low-wage earners in our society is always close to my heart.
Minimum wage prompts improvements
This brings me to the important role played by the Statutory Minimum Wage (SMW) which has been in place for more than two years in Hong Kong. On this hard-won breakthrough in Hong Kong's labour policy, I am delighted to announce that there has been substantial improvement in the earnings of grass-roots employees following the implementation of SMW in May 2011.
For the period of February to April 2013, the average monthly employment earnings of the lowest decile group of full-time low-income employees registered a year-on-year increase of 8.7% (or an increase of 4% after discounting inflation), outpacing the overall average pay rise of 1.9% (or a decrease of 2%).
Based on statistics in 2012, it has also been estimated that with the implementation of the new SMW rate of $30 per hour with effect from Labour Day (May 1) this year, some 210 300 low-paid employees would be covered.
Furthermore, by implementing the former time-limited Transport Support Scheme since 2007 and the territory-wide Work Incentive Transport Subsidy (WITS) Scheme since 2011, we aim at easing the burden of transport costs faced by low-income earners to commute to and from work.
Under the WITS Scheme, an eligible applicant receives a monthly subsidy of $600 (for those working no less than 72 hours per month) or $300 (for those working less than 72 hours but at least 36 hours per month).
And this Government has lost no time in enhancing the WITS Scheme with effect from this January by providing the option of individual application as an alternative to household application and relaxing the income and asset limits in parallel. What is more, we have undertaken to adjust the income and asset limits annually before a comprehensive review of the scheme.
We have also been thinking out of the box in exploring how to better motivate able-bodied CSSA recipients to take up employment. To further encourage CSSA recipients to take up employment and to strike a balance between the need to encourage work and the proper use of public money, we will launch a pilot scheme on savings accounts through the Community Care Fund to save up the earnings not disregarded under the Disregarded Earnings arrangements for the CSSA recipients who are in employment.
The Social Welfare Department is now working out the details and will consult the Commission on Poverty later.
In addition, the Commission on Poverty has also initiated discussion on how to support low-income working families not on the CSSA scheme in its fourth meeting in late May. We will listen to and study the views raised in the commission and propose more suitable and concrete measures in due course.
I have given a pen-picture of Hong Kong's latest work on the poverty alleviation front - focusing on new measures targeting poor elderly persons and low-income families. It is no exaggeration to say that over the past 11-plus months, this Government has been using an ever-growing toolbox to tackle poverty and empower various needy groups in the community. We will continue to work hand in hand with all sectors to improve the well-being of the disadvantaged and light up their lives with hope and dignity.
Secretary for Labour & Welfare Matthew Cheung gave this address at the engagement evening, "Tackling Poverty in Hong Kong", organised by Community Development Initiative.