Tsang defends market-intervention, old-age allowance policies

The government is using market-intervention policies only as temporary measures to restore “balance” to weak sectors, Financial Secretary John Tsang Chun-wah said on Wednesday morning.

Speaking at a forum on welfare populism, Tsang said: “We are still a firm believer in the market and, it is only when the market begins to fail that, in selected areas, we introduce intervention helping to restore the balance.”

“Once the balance has been restored, we return to the status quo.”

His remarks were in response to earlier speakers who raised doubts about current government measures to curb the property market uptrend, including stamp duty policies.

Tsang then gave a speech in which he defended the government’s plan to have the Legislative Council approve its new old-age allowance scheme.

“Some members in the legislature continue to advocate that all people in our community – regardless of their state of wealth – should receive the allowance as a right, and insist that it should not be means-tested.

“Some people go as far as to justify that the allowance should be the first step to a universal retirement protection scheme for all, which is another question altogether.” That suggestion, he said, is “a really slippery slope for us to embark upon”.

“I believe that any welfare programme should be affordable now, without placing too heavy a burden on future generations,” Tsang said.

“Politicians worldwide are often tempted to introduce welfare measures … but the cost will often only become evident in the future,” he said, citing the Greek and Argentine examples of economic breakdown.

The forum was co-organised by the Fraser Institute, a Canadian free-market think tank, which has ranked Hong Kong first in its latest index on global economic freedom.