• Sat
  • Aug 23, 2014
  • Updated: 5:15am
CY Leung policy address 2014
NewsHong Kong
GOVERNMENT DEBT

Business leaders quiz Leung on sustainability of his welfare package

PUBLISHED : Thursday, 23 January, 2014, 4:09pm
UPDATED : Friday, 24 January, 2014, 4:03am

Business leaders have expressed concerns about the city's ability to sustain a multibillion-dollar welfare package rolled out in Chief Executive Leung Chun-ying's policy address last week.

The leaders yesterday asked Leung for details on how he intended to shore up economic growth to fund the splurge on poverty alleviation.

"Without economic development, we cannot sustain the nice social policies," Chow Chung-kong, chairman of the General Chamber of Commerce, said.

Chow, also an Executive Council member, was speaking at the lunch gathering held annually for the chief executive to explain his policy address to the city's business community.

The address increased recurrent spending by about HK$10 billion. Among the initiatives was a HK$3 billion annual subsidy for low-income families.

Another chamber representative asked Leung: "You say we have a healthy budget … but the financial secretary says the funds will run out. … Where will the funding come from?"

Leung said a "dynamic" view had to be taken in evaluating both sides of the government's balance sheet.

"Taking a straight line of prediction on both the expenditure and the income does not represent the real picture," he said, pointing to a reduction in spending on Comprehensive Social Security Assistance.

The 122-table audience, comprising five leading local chambers and a list of international chambers, also pressed Leung on whether he planned to abolish the Mandatory Provident Fund's "offsetting" mechanism.

A member of the Federation of Hong Kong Industries said: "The long-service and severance payments … are supposed to be for retirement purposes. … Any cancelling of the offsetting mechanism would add a serious burden [for employers]."

Leung said the issue was open for discussion, with the aim of "getting employers and employees on the same side".

"My election pledge is to gradually cancel the mechanism. But how gradual is something for discussion," he said.

Separately, MPF Schemes Authority executive director Cheng Yan-chee said the watchdog had not received any instruction to study the possibility of scrapping the mechanism, which allows bosses to take workers' severance payments from employer contributions to retirement accounts.

Such a move was not technically difficult from the authority's point of view, but it was the government's responsibility to look into any impact it might have on small and medium enterprises, he said.

 

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This article is now closed to comments

dynamco
tax shareholder dividends - double enough to do away with salaries tax
chuchu59
While I am all for helping those in dire need the businessmen have asked a legitimate question and the government needs to answer that. There is a possibility that the billions in combating poverty will continue to grow in the years ahead and this could only be sustained either through new taxes, cuts in other expenditure or a combination of both. In an affluent economy as HK there is a dire need to help those less privileged and businesses should suggest ways to the government and could well join hands with it to meet the huge demand.
johnyuan
Businesses who question about the source of billions for helping the working poor worry the most that the money would come out of their business profits. In their books, never mind billions even hundreds would become an issue. Just look how long and little Hong Kong finally has minimum wage by law (20 years behind US in its recent history) and it is not even a living wage. Like many other measures in Hong Kong, they all serve to pulling wool in front of our eyes as well as world’s community that Hong Kong is a world city with all the likes of being one. The reality is shameful.
.
Dishonest and real thick skinned -- the second largest number of billionaires in a city in the world.
 
 
 
 
 

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