• Fri
  • Dec 19, 2014
  • Updated: 9:19pm
Leung Chun-ying
NewsHong Kong
POLITICS

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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This article is now closed to comments

lexishk
So, this guy says practically nothing of use. Is he the reason for the policy vacuum during Donald's reign?
chuchu59
Most of the middle class wont feel disgruntled over the city's increasing welfare spending. In fact, being one of them myself I rather feel it has come a little late. If the spending truly helps those in need I am more than happy that the government does the right thing and will deem that my taxes are gainfully deployed. Nevertheless, the government should also show it has not neglected the middle class in favour of the most needy. CY was unable to show that the middle class was included in his Policy Address and only said the improvement in the environment will provide a better atmosphere for the middle class. Well, doesn't it bode well for the whole of HK not just the middle class? Most of the middle class folks are reasonable people who don't need to be pampered but just hope they wont be neglected or forgotten.
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.
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!
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.
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.
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.
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.
johndoe
No more socialism, thanks. There are too many takers. Just offer some freebies to the Mainlanders and you will see.
Artie
The middle class is fed up with the hoarding of cash by the HK Govt and not doing enough for them and the poor.

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