Retirement payments would help fuel Hong Kong’s economy just as much as a third runway

Few people would dispute that Hong Kong is in dire need of a much better retirement protection scheme for our ageing population. However, that is as far as the consensus goes. There is no compromise in sight on how to move forward.

Last year, the government commissioned Professor Nelson Chow Wing-sun of the University of Hong Kong to study how to tackle the problem. After spending a year comparing six different proposals, he recommended a universal retirement plan to cover all residents aged 65 or above in the form of a monthly allowance.

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Chief Secretary Carrie Lam Cheng Yuet-ngor, who heads the Commission on Poverty, accused Chow of being impractical. She dismissed his team’s recommendations as “unsustainable” and “made casually” without the benefit of “serious academic research”. That is an insult not only to the emeritus professor of social work, but also his peers. Some 180 academics have pledged to boycott the current engagement exercise on the topic.

The government listed two possibilities in its consultation paper. The first option is a universal “regardless of rich or poor” option with an uptick from HK$22.6 billion in 2015 to HK$56.3 billion in 2064, leading to an overall increase in expenditure of HK$2.39 trillion for 50 years. This is supposed to be feasible only by either introducing new taxes or raising current tax rates.

The second way is a non-universal “those with financial needs” option with an uptick from HK$2.5 billion in 2015 to HK$6 billion in 2064, leading to an overall increase in expenditure of HK$255.5 billion for 50 years. The paper uses an asset limit of HK$80,000 for a means test as a basis for discussion.

Officials have taken the money needed to finance the retirement options simply as expenses. This is in sharp contrast with the way they promote major infrastructure projects.