A sense of security

PUBLISHED : Thursday, 18 December, 2008, 12:00am
UPDATED : Thursday, 18 December, 2008, 12:00am

Hong Kong must do everything it can to create social stability by reassuring families they need not worry about basic public services during economic downturns. The government should declare in the 2009 budget that it will not raise prices on things like school fees and public sector health services, and will even reduce them.

This would be the equivalent of the government guaranteeing all bank deposits in Hong Kong: that was the right thing to do because it made people feel safe to leave their money in banks. In one stroke, the government removed the potential for panic. It did not actually have to spend a cent in giving the guarantee, but the move generated trust and stability in the banking system - just what was needed at the time.

Other measures the government is promoting include a HK$100 billion loan guarantee scheme for small and medium-sized enterprises, expediting infrastructure projects and advancing the recruitment of civil servants, as well as creating temporary employment posts in the public sector.

Job creation is good, of course. But let us take a wider view of what else could be done to help Hong Kong build a stronger foundation for the long term. Other measures include recruiting to strengthen our public hospitals, improving public health and food safety inspection, and increasing spending and capacity on the provision of special needs education. Are these on the list, or is the government looking mainly at projects that pour concrete and clean streets?

Another package of measures so far neglected that should be put in place has to do with public services and the provision of welfare. Instead of putting out the usual official mantra that Hong Kong needs to constrain such spending once the economy goes into recession, the government should look at them as an essential way to give people a sense of security.

The bulk of welfare recipients are the elderly poor. Those who are younger but on welfare, and have problems finding jobs even in good economic times, are the poorly educated. This is the consequence of past education policy: Hong Kong took too long to provide universal education, leaving a group in our society trapped because it cannot be easily retrained. The bulk of the rest are people with illnesses or disabilities.

Cutting back payments or services to them would not be the right way to go. In light of the deep disparities of wealth in Hong Kong - we are among the worst - bad times mean the government should ensure that the poor and those who are less well off do not bear a larger proportion of the burden.

Instead of considering cutting welfare on the basis that everyone has to tighten their belt, the government should consider how it can better provide for the most disadvantaged. Is it possible to increase payments to this group in the coming year?

There are suggestions of giving spending vouchers to Hongkongers so we can keep the economy going. Instead, why not increase payments to those who are already short of funds because they need to spend more on food, home staples and medicine, for example?

There are heartbreaking stories of the elderly poor being unable to afford enough to eat, and those with illnesses requiring longer-term treatment being unable to pay for better medicine because the public system no longer provides for it. The government should also reassure families with special-needs children that services will not be cut back. These are exactly the sort of people who should be helped now.

Another group to help are low-income working families paying for their teenage children to go through community colleges. Fees are significant because they are not subsidised. It would be a tragedy if some were unable to pay because parents lose their jobs. The government can cut fees and look at how to ensure that students continue in school even if they cannot afford to pay.

A well-crafted budget would help us all feel safer.

Christine Loh Kung-wai is chief executive of the think-tank Civic Exchange