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  • Apr 25, 2014
  • Updated: 3:58pm

Leung Chun-ying

Leung Chun-ying, also known as CY Leung, is the chief executive of Hong Kong. He was born in 1954 and assumed office on July 1, 2012. During the controversial 2012 chief executive election, underdog Leung unexpectedly beat Henry Tang, the early favourite to win, after Tang was discredited in a scandal over an illegal structure at his home.

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Former adviser warns Leung of middle-class backlash over welfare spending

Government faces resistance from middle class over its measures to improve the lot of the poor, says former head of Central Policy Unit

PUBLISHED : Tuesday, 04 February, 2014, 12:55pm
UPDATED : Wednesday, 05 February, 2014, 5:03am

Chief Executive Leung Chun-ying will find it more difficult to govern in the face of a middle-class backlash over the city's rising spending on welfare, a former top government adviser says.

Professor Lau Siu-kai, former head of the Central Policy Unit, a key official think tank, said the billions of dollars promised to the poor in the policy address had sparked concerns about "creeping welfarism" and the sustainability of public finances among middle-class Hongkongers, who shoulder the lion's share of the city's tax burden.

He warned that Leung's spending plans may be sowing the seeds of conflict between the middle class and low-income residents.

"People of middle-class background generally feel they get little benefit from the policy address," Lau said. "The anxiety and grievance among the middle class will intensify the conflict between them and low-income groups."

Lau, now a professor emeritus of sociology at Chinese University, said previous studies conducted by the university found the middle class were generally in favour of social justice but had reservations about big rises in welfare spending.

He said the poverty alleviation measures announced in the policy address, such as the HK$3 billion-per-year Low-Income Working Family Allowance, would condition underprivileged groups to expect more government handouts.

Depending on the hours they work, families whose income falls below the poverty line - drawn at 50 per cent of median household income (HK$22,500) - will receive either HK$600 or HK$1,000 a month, plus HK$400 or HK$800 a month for each dependent child.

Lau attributed the luke-warm response to Leung's second policy address to middle-class resistance. Polls conducted by the University of Hong Kong's public opinion programme on January 16 and 17 found Hongkongers gave the blueprint an average mark of 48.1 out of 100, six points lower than the result of an instant survey carried out directly after the address.

Advisers to Financial Secretary John Tsang Chun-wah estimate that government expenditure might outstrip revenue in 10 years. Tsang is expected to announce in his budget speech this month that the city's fiscal reserves of HK$734 billion will run dry in about 20 years if nothing is done to ease the financial burden of its ageing population.

"The government is facing more difficulty in its governance in the wake of shrinking fiscal resources and the escalating political tension arising from the debate on political reform," Lau said.

He echoed Executive Council convenor Lam Woon-kwong's views that public sweeteners are not a recipe for boosting the government's popularity.

"The experience of the past few years has indicated a diminishing political return from doling out sweeteners. The government must come up with sensible policies to facilitate economic development and boost housing supply," Lau said.

But Lau noted the government was facing a no-win situation as it drafted the budget. "It would not draw much applause from the middle class if it offered [them] sweeteners in the budget. But it would certainly spark an outcry from the middle class if it scrapped or substantially scaled down sweeteners."

 

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lucifer
....expect the backlash if you keep giving it to Mainland immigrants when they arrive and have no system set up to check their hidden wealth or laws that require jail for not declaring assets (held on the Mainland.) These people take us for idiots throwing money out a window and they are just scooping it up.
artdig18
The middle class is fed up with the hoarding of cash by the HK Govt and not doing enough for them and the poor.
johnyuan
From elsewhere of my comment earlier:
.
The silent majority of the locals are the inconspicuous group. It has no political agenda and exists simply mostly by being apathy towards politics. But, when they are awakened they usually would become formidable. What we need to do is to wake them up sooner than later. I believe the silent majority’s view would convince the rest of Hong Kong that we must have a present in order to have a future. The wakening of the silent majority is very much the duty of the government especially by the hands of CY Leung. His livelihood issues not only to help those who find living in Hong Kong difficult but more it is paramount in defusing a time bomb of mass unrest – particularly the young people must to have opportunities to be contributing members of Hong Kong.
johnyuan
The silent majority which is the middle class by income classification, It is not clear that 48.6 % approval rate of the second policy speech is a low score. If the center piece of the proposed policy is about financial assistance through workfare we would say if the benefactors (the poor folks) were added to the poll then there would be about 68.6% approval rate. For a very political divisive society of which giving money to the poor is a political issue, 68.6% in agreement is an alarmingly success for CY Leung’s main blueprint -- war on poverty?
.
The amount of money for the individual to be dosed out to the working poor in Leung’s proposal is very little actually (in the hundreds of dollars), but the aggregate is big due to 20% of the population is in need of help. It is very unusual if the middle class in Hong Kong can’t be in sympathy with the working poor. They know if they don’t have two incomes hardly they can’t support a family in Hong Kong. They would become part of working poor immediately too if only one job can be had for a family.
johnyuan
It is indisputable that Leung’s workfare is a daring act that would invite political disagreement. Surprisingly not much from the people but mainly more from government itself by the questionable in ability and loyalty of the Financial Secretary,
.
In my view, for Hong Kong government to assist effectively the middle class is to help out in their mortgage payment so that one income instead two can be a choice. Life quality would immediately be improved for them.
.
CY Leung should think outside of the box again by using the trillions of reserve to reimburse the flat owners whose various property taxes had contributed to the government’s reserve which is sitting idling.
.
Professor's comment may be creating a wrong impression in our current affair.
captam
@ Greenwash "the hundreds of billions spent on trains and bridges we don't need - "
The bridges , Yes because the last thing we need is additional vehicles on our congested roads, BUT you are totally wrong about the trains. It is imperative that we are connected to the Mainland's developing high speed rail network if Hong Kong's economy wishes to survive. Railways are good for the environment too... we have too many small, noisy and and polluting aircraft flying to Chek Lap Kok.
keresearch
The middle class are not fed up with welfare expenditure - they are fed up with hoarding of reserves with John Tsang creating **** and bull stories about why he needs to tax them even more.
HK - Explorer. MTR lines are not funded by the Government, the funding comes from fares and property development rights given to them by Government. The Government does not fund public housing either, the HA does that from HOS sales and rental income. It gets free land.
keresearch
The middle class are not fed up with welfrae expenditure - they are fed up with hoarding of reserves with John Tsang creating **** and biull stories about why he needs to tax them more.
HK - Explorer. MTR lines are not funded by the Government, the funding comes from fares and property development rights given to them by Government. . The Government does not fund public housing either, the HA does from HOS sales and rental income. It gets free land.
HK-Explorer
Extra MTR lines are a very effective use of tax payers money and provides long term benefit to all residents. If anything the government has done too little too late and should have started this 10 years ago. That is why Admirality and Mong Kok are a nightmare today.
I do feel that the Hong Kong government is putting too much public money into building government housing. There is a need but only about 50% of what they are stating. The government knows fully well that 500,000 homes will not be built in 10 years (they are not needed). They are just playing up to the public to gain some popularity. Most people have been around too long to believe that.
Greenwash
Maybe the middle class feels a bit more upset over the hundreds of billions spent on trains and bridges we don't need - or on the 500,000 flats the government wants to build for mainland investments and immigrants!

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