Defining how much one needs is next step in poverty issue

Commission will have tough job of deciding which standard caters best to the city's needs

PUBLISHED : Tuesday, 11 December, 2012, 12:00am
UPDATED : Tuesday, 11 December, 2012, 3:20am

Hong Kong is finally taking a baby step on the poverty issue: consensus on the poverty line is close, and it is expected to be set at 50 per cent of median income - meaning those living on less than half that amount are considered to be living in poverty.

But details of the line - whose introduction is seen as an indication of the government taking a more serious stance on dealing with the city's poverty issues - have yet to be hammered out and nailed down.

After the standard is set, the next step would be to nail down an "equivalent scale", which would require compromise between the government and various NGOs and grassroots groups, said Commission on Poverty member Stephen Fisher, former director of the welfare department and current director-general of Oxfam Hong Kong.

An equivalent scale is needed to calculate how much money each household member requires, and each household will be assigned with an "equivalent household" value.

A household with two adults and two children may spend more than a household with four adults. A single adult may need a certain amount for basic living, but if two adults live together, there may be things that can be shared between them.

According to the Oxford equivalent scale, which is widely used in EU countries, a second adult in a household is counted as 0.7 of the first adult, and a child as 0.5 of the first adult.

So, according to that scale, a household for two adults and two children would be equivalent to a household of 2.7 adults. But in Hong Kong, Fisher said the cost of raising a child may be more than an adult's cost of living, so Hong Kong has to choose carefully which scale to use.

After households have been assigned standardised values, their median incomes can be drawn and then halved to give a line, where someone living under that level is considered poor.

"The equivalent scale chosen is important," said Fisher. "The poverty line is very sensitive to it, and [the numbers] can change a lot depending on the scale."

There are various scales already available, he said, and Hong Kong has just to pick what best suits its situation.

"The argument will not be on the poverty line, but on which equivalent scale to pick," Fisher said. "We need to choose the right equivalent scale for the right reasons. There is a risk that the government will choose the scale which would produce the least number of poor people.

"Some may be by definition poor, but are they living in poverty? That is a factual question, not a statistical one.

"If you want to study the problem of poverty, we need another approach, called budget standards. Instead of just looking at income disparity, we need to see what is the minimum acceptable standard of living … acceptable to most people in Hong Kong."

Research can be done through study groups, recording what is considered necessary for living decently in Hong Kong - be it three meals a day with rice and some meat in at least one of the meals, or a mobile phone - and coming up with a "basket" of necessary goods. So, those without items in that basket would be considered as living in poverty, said Fisher.

To see the poverty line become a long-winded, overdrawn political debate is the last thing everyone wants, he said.

"We want the poverty line to help us understand the poor, and find better measures to solve the problem, not to turn it into a political argument which will drag on for a year or two," Fisher said.

Ultimately, it is the issue of poverty that we need to deal with, not just its definition.