CY Leung policy address 2014

Low-income family supplement a step forward but more needs to be done

PUBLISHED : Thursday, 16 January, 2014, 7:11am
UPDATED : Thursday, 16 January, 2014, 7:11am

The chief executive used his policy address to introduce a new initiative to help working poor families who have been suffering for decades.

The low-income family supplement, a secondary safety net advocated by grass-roots organisations since the handover, shows a fundamental change in the way the government views wealth distribution.

It is a step by the administration towards tackling one of the deep-seated contradictions in our society.

According to statistics from the Commission on Poverty, about 300,000 low-income households that do not receive welfare have monthly incomes below the official poverty line, of which 48 per cent - 143,500 families consisting of 493,200 people - are working poor.

Statistically, the typical working poor family consists of three people and has the equivalent of 1.1 full-time workers.

About 80 per cent of the families have at least one member who works full time, and the family also has to look after its children.

Simply put, low-income workers cannot enjoy a basic standard of living even if they work hard. Worse still, about 1.8 million people have seen no improvement in their real income, after taking inflation into account, since the handover.

Despite the attempt to tackle income disparity, the new subsidy is only a small step forward, albeit a welcome one.

About 120,000 households remain on the waiting list for public housing.

According to a survey on urban slums conducted by the Society for Community Organisation, respondents living in inadequate housing were spending more than one-third of their income on rent.

The next steps to tackle poverty should be a long-term housing strategy and measures to reduce the waiting period for public housing.

The ageing population presents another great challenge and a comprehensive retirement protection scheme to assist elderly people living in poverty is needed.

The low-income subsidy tackles poverty by using a secondary wealth redistribution mechanism.

But no matter how hard the working population toils, their incomes are unlikely to increase in line with economic growth.

It is therefore essential that the government improves the primary wealth distribution mechanism by developing a rounded and multidimensional economic policy to increase working opportunities and improve the remuneration of the low-skilled labour force.

But, in view of globalisation and the rapid development of labour-intensive industries on the mainland, the future direction of economic policy remains uncertain.

Ho Hei-wah is director of the Society for Community Organisation