• Thu
  • Sep 18, 2014
  • Updated: 3:37pm
NewsHong Kong
POVERTY

Hong Kong General Chamber of Commerce says no to payments for retirement scheme

Business chamber rejects extra tax on firms and says government should foot bill to help poor

PUBLISHED : Wednesday, 20 August, 2014, 4:14am
UPDATED : Wednesday, 20 August, 2014, 12:18pm

One of Hong Kong's most influential business chambers says it opposes any retirement protection scheme that would require employers to inject money.

Shirley Yuen, chief executive of the Hong Kong General Chamber of Commerce, said the government should be responsible for funding such schemes.

"You can imagine that people have reservations about it [asking employers to pay]. In Hong Kong, the cost of running a business is not low," she said yesterday.

A long-awaited study on retirement protection schemes by University of Hong Kong academic Nelson Chow Wing-sun, commissioned by the Commission on Poverty, will be tabled at a commission meeting on Wednesday.

The study is expected to analyse the sustainability of proposals put forward by six groups, including the Alliance for Universal Pension, the Federation of Trade Unions and the Democratic Alliance for the Betterment and Progress of Hong Kong.

The alliance suggested companies that make an annual profit of more than HK$10 million pay additional profits tax of 1.9 per cent for injection into a pension pool. It said the government should also contribute HK$50 billion.

The FTU proposed that both bosses and workers should transfer 1 per cent of their mandatory provident fund contributions to the pension scheme. They should also each pay an additional 0.5 per cent of their monthly salary into the scheme.

Table: How the six plans break down

 

Yuen said she opposed extra taxes for businesses to fund a retirement scheme as this would be "against the international trend".

She proposed a means test so that limited resources went to those most in need. "Is there a need to give away limited resources to everyone, no matter whether they are rich or poor?"

She said the government could consider improving existing safety nets, such as the old age living allowance.

"The old age living allowance has reduced the old-age poverty rate from 33 per cent to 23 per cent and that is encouraging," she said, citing a report by the Institute of Education.

She said the issue had to be dealt with carefully because the working population would start to fall after 2018, and on top of an ageing population this would mean fewer people contributing to the pension scheme but more taking money out of it.

Au Yeung Kwun-tung, the alliance's organiser, said the additional tax the alliance proposed was necessary to make the scheme sustainable.

"We understand that there can be pressure for small to medium-sized enterprises. That's why we are asking the big companies to pay, because they have less pressure," he said.

FTU lawmaker Tang Ka-piu feared the scheme would be unsustainable if only the government paid for it.

"If the government faces financial troubles in future, it is hard to imagine what can happen to the scheme," he said.

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This article is now closed to comments

virokick
We should rejoice at the stupidity of The HK general chamber of commerce.
With this they risk being exterminated.
skhk
Ridiculous! Hong Kong businesses make tons of profit.
BabyMan
How old is this girl?Woman? She sounds like the old US movie:"Wild in the Streets". Let's do likewise and round up everyone over 35 and put them in camps.
Cities that not do much for children and the elderly are sick and need to be reorganized.
One day when she is living in some old flat and can't get a visiting nurse to come and help her change her colostomy bag she should remember her comments today and how they affect this generation's callousness and short sighted views on what is important in society and the selfishness of the rich and disrespect for the elderly.
Bean counters beware. Your days are numbered. Go back and hang out in Starbucks with your Lattes. Leave public responsibilities to people who are actually intelligent and care about issues instead of to kids who can't cut it in the real world and get placed into jobs that require wisdom and intellectual talent.
daily
She sure sounds pretty stupid to make such a comment even though she is speaking on behalf of the HK General Chamber of commerce............there is nothing wrong in having HK employers sharing the burden of retirement protection.
@madams
Shirley Yuen sounds like another ignorant mouthpiece lobbyist, more interested in maintaining the status quo and staying uninformed of the suffering of ordinary people. She is quoted, "The old age living allowance has reduced the old-age poverty rate from 33 per cent to 23 per cent and that is encouraging," But Shirley, it is still 23% in a developed, first-world economy! It is still 23% after we have put the elderly into subsidized apartments paid for by middle class and rich alike.
Despite useless Yuen, the bigger abomination are public officials like KC Chan who who are just out of touch with average people. Chan refuses to lead the way on pension reform and retirement planning. This despite the obvious demographic challenges we face in HK and clear evidence of poverty among elderly retired. At one lecture i attended, Chan belittled suggestion by a professor that HK implement a tax benefit for savings like the US and Australia. According to Chan HK people don't care because taxes are already low here. Of course that makes no sense, most people don't give up a freebie. In HK people line up for an hour in stifling heat for a free bubble-tea -- but they won't partake in a savings program that will net them much more?
HK is not alone is having bad leaders, but this is our home.
randomtask
The US have a tax benefit for savings? Is it enough to offset the loss of american savings through the debasement of their dollar with all their QE?
HK government is messed up, but at least they are still far more responsible than their western counterparts.
mh0908
Is this meant to be similar to the Social Security program in the US or a defined contribution plan? How is the Social Security program doing in the US by the way?
BabyMan
So more about your wallet then heart mh? Wait till they through you in a Wafu old people's home when you go broke which you will through your greedy little thoughts. The SS program is not doing well because they have similar bafoons in government like here. It is not the program it is the government dummy.
As long as you put money first you will miss the bigger idea. If you do not know what it is then good luck.
chaz_hen
How's your MPF doing, by the way?
sipsip1238
So in Hong Kong, we pride ourselves as being an international city, but we apply third world standards when it comes to providing a sense of security for the bottom sector of the workforce.
We created a MPF which so skewed towards employers that it might as well not be there, allowing employers to claw back what belongs to the employees.
As someone who luckily has had the fortune of being a relatively high income earner while also being an employer as well, it is sad being a local when I speak to people at conferences both for my industry and employers, it is in fact mostly locals who do not care about charity for the needy, while friends I grew up with overseas can take time to volunteer and help people.
Why is it that we have such a skewed view of wealth in this city? Sometimes, giving and making others lives better actually gives you more utils than having a bigger bank account.

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