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Carrie Lam

Carrie Lam inherits more unfinished business

In addition to the stalemate over a proposed law on standard working hours, the new chief executive is being drawn into the deadlock over the proposal to abolish the so-called offsetting mechanism for the Mandatory Provident Fund

PUBLISHED : Saturday, 01 July, 2017, 1:31am
UPDATED : Saturday, 01 July, 2017, 1:31am

Carrie Lam Cheng Yuet-ngor is inheriting yet another unfinished business from Leung Chun-ying, who stepped down as the chief executive yesterday. In addition to the stalemate over a proposed law on standard working hours, Lam is being drawn into the deadlock over the rule allowing bosses to claw back contributions into workers’ pension funds to cover severance and long service payments. Whether she can settle both issues satisfactorily is being closely watched by the business and labour sectors.

The new leader would not have to handle the two outstanding issues had they been given higher priority over the past years. The proposal to abolish the so-called offsetting mechanism for the Mandatory Provident Fund only came in Leung’s final policy address in January. The details were endorsed by the Executive Council in a special meeting just a week before his term ends.

Defending the much-criticised outcome, Leung admitted that he was trying to make good his campaign promise. He said he would be glad to see whatever improvements are made by his successor. Chief Secretary Matthew Cheung Kin-chung, formerly the labour minister, said the government knew all along that neither employers nor workers would be pleased.

The true ‘mountains’ that Carrie Lam has to climb

Obviously, Leung is keen to be seen as having all his promises fulfilled. But it is meaningless if the proposals stand no chance of being implemented. Last year, some HK$3.85 billion was offset by employers – 70 per cent up from HK$2.27 billion in 2012. That makes scrapping the mechanism all the more important. Under Leung’s proposal, the government will fork out HK$7.9 billion in subsidy to phase out the arrangement in 10 years. Belated as it is, there is a clear goal post and timetable. We can further discuss on this basis; or reject it altogether and let the situation continue. The choice is clear.

The new leader has yet to make clear how the two issues would be resolved. But when she was still No 2 in the Leung team, she acknowledged that the offsetting mechanism was one of the three big mountains facing the government. It would be difficult for her to distance herself from the challenge.