Setting a poverty line is just the start

PUBLISHED : Tuesday, 01 October, 2013, 12:00am
UPDATED : Monday, 30 September, 2013, 11:57pm

Over the weekend, more than one million people were officially declared "poor" in Hong Kong. This came after the government released for the first time a poverty line defining who is poor in this city of seven million. Those earning less than half of median monthly household income are classified as needy. That translates into HK$3,600 for a single worker and HK$11,500 for a family of three. After discounting existing benefits paid in cash, some 403,000 households, or 15.2 per cent of the population, are still classified as poor. The figures are disturbing.

If resolving poverty was as simple as drawing a line, the buck would not have been passed from one government to another. Over the years, the idea of a poverty line has been cold-shouldered by previous chief executives. This is hardly surprising, given the issues involved and the political implications that arise. Credit, therefore, goes to Leung Chun-ying for his courage and commitment. He believes the line can make targets clearer and measures more focused to meet the challenge of bettering the poor's lot. It is a welcome step.

Setting a poverty line raises expectations, however. Those who fall under it will naturally expect some relief measures. Indeed, hopes have been raised to such a high level that the poverty line may backfire if no visible improvement is seen in the coming years. The pressure to deliver is rising fast.

Whether public housing and other subsidies should be discounted is open to discussion. The figures may look less alarming after taking into account assets and savings. But whatever benchmark is used, the truth is that the population of the poor remains sizeable. Particularly worrying is that despite the introduction of a minimum wage a few years ago, half a million people still fall into the poverty net.

Setting the line is just the beginning. The chief executive is right in saying that poverty can never be eliminated under the comparative income concept. Nonetheless, he will still be judged by how much the situation has improved at the end of his tenure. Clear targets are essential.

A wealth of proposals have been put forward by different groups, such as giving out a cash living allowance. Appealing as it sounds, subsidies with long-term financial implications must be carefully considered. As the chief secretary rightly stressed, the measures should be structured to sustain self-reliance while enhancing opportunities for upward social mobility.