Hong Kong's poverty rate halved if housing subsidies are counted, study finds

But welfare advocates say public housing should not be part of income calculations

PUBLISHED : Monday, 02 September, 2013, 12:00am
UPDATED : Monday, 02 September, 2013, 7:54am

The number of poor in Hong Kong drops by almost half - from 1.29 million to 690,000 - if public housing subsidies are counted as part of a family's income, a study found.

The figures will be presented at the launch of Hong Kong's official poverty line later this month.

But experts warned against using public housing as a means of "lifting" people out of poverty, and they fear the government might use such figures to downplay the plight of the poor.

Preliminary figures were unveiled in a closed-door meeting of the Commission on Poverty last month, where a report translated public housing into government subsidies by estimating the market worth of public flats and subtracting the rent paid by tenants, said a source familiar with the government figures.

Ho Hei-wah, director of the Society for Community Organisation, a group that helps the underprivileged, said the report should be used for reference only. Ho said treating public housing as a subsidy and counting it as income should not be used to calculate the poverty line.

Oxfam Hong Kong's director, Stephen Fisher, said the charity was also opposed to treating public housing as a subsidy. "In real life, if the poor couldn't obtain public housing, they would be renting much worse and much smaller places."

Fisher said if a public housing flat in Tin Shui Wai rented for HK$1,000, but a private flat in the area cost HK$6,000, the government would assume the difference of HK$5,000 as a subsidy given to the tenant. Such a calculation halves the number of poor, but Fisher said it would not be a true reflection of poverty.

Hong Kong will establish two poverty lines. The first will be set at half of median household income after taxes but before welfare payments are counted. The number of people living in poverty under this line is 1.29 million.

The second line will be set at half the city's median household income, after taxes, but counting welfare payouts like the Comprehensive Social Security Assistance and disability allowance as income. The number of people living in poverty falls to just over 1 million in this calculation.

Leung Cho-bun, professor of social welfare at the University of Hong Kong, said such lines were only for reference; what mattered most were effective policies to tackle poverty.

"It's about having a better view of the target groups," he said. Apart from the official line, the other calculations would help in identifying the demographics of people at risk, he added.

Chief Executive Leung Chun-ying is likely to release details at a summit on September 28.