Incentive scheme is a straight wage subsidy by any other name

Transport subsidy may be left in limbo

SCMP headline, February 15 It is not a transport subsidy. The Work Incentive Transport Subsidy Scheme will be a straight HK$600 a month giveaway to any working person who qualifies as being sufficiently poor.

It won't matter whether he or she spends the money on bus fare to get to work or spends it on lunch because work is right next door to home. There is no requirement at all that the money be used for transport. If you qualify as poor enough the government will transfer HK$600 to your chosen bank account every month.

This is a wage subsidy. There is nothing transport about it. The only reason it is called a transport subsidy is that it replaces a 2007 scheme that gave HK$600 a month to low-paid workers from outlying districts. That earlier scheme was arguably transport-related as it covered workers with long commutes. Its successor covers everyone in Hong Kong, long, short or no commute at all.

It is also more generous. The earlier scheme had a wage hurdle of HK$6,500 a month. This has now been lifted to HK$10,000 a month for a two-person household and HK$13,000 for a three-person household.

But this is not the most important figure in determining how effective this scheme will be. The statistic that really tells the story is a government estimate that 380,000 workers, or about half of those who qualify, will take up their entitlements.