RETIREMENT PROTECTION

War of words: Carrie Lam says Hong Kong government adviser on retirement protection doesn’t fully understand public financing

Government accused of omitting feasible options for a universal retirement plan, while Carrie Lam and professor attack each other on radio

PUBLISHED : Wednesday, 23 December, 2015, 12:02pm
UPDATED : Thursday, 24 December, 2015, 1:22am

Academics accused the government of conducting a sham public consultation on retirement protection by omitting two feasible options for universal pension, and launched their own public exercise yesterday while boycotting the government’s.

Endorsed by 180 academics from different higher education institutes, their proposal would see close to  HK$17 billion leftover in government coffers by 2064, while the newest proposal by expert Nelson Chow Wing-sang launched on Tuesday will see a HK$5.9 billion leftover.

In contrast, the two options listed in the government consultation - a universal option portrayed to be unsustainable, and a means-tested option which only benefits 23 percent of the elderly population - are “non-options”, said academics. 

READ MORE: Lose-lose situation on Hong Kong pension options: face much higher taxes or force elderly means-testing

“The government isn’t seeking public opinion on retirement protection, it’s announcing that they won’t do a universal retirement protection scheme because it is not feasible - which is untrue,” said Chung Kim-wah, assistance professor at Polytechnic University. 

In the academics-endorsed proposal, all elderly will get HK$3,500, funded by a few sources: moving 5 per cent of future MPF contributions, injecting a HK$100 billion government money, combining current elderly welfare handouts and increasing profits tax by 1.9 per cent for companies earning HK$10 million or more per year - into the scheme. 

This will result in a HK$16.82 billion surplus, without needing to dip into government savings. 
Both Chow’s new proposal unveiled on Tuesday and the academics’ proposal uses multi-pronged funding models and not a singular tax-raising funding - like the government’s options. 

READ MORE: Hong Kong government adviser on pension plan accuses officials of treating him unfairly by stoking fears of higher taxes

Chow also said on a radio interview that the government has never used taxes to measure how much more money to spend, and to do so is to scare the public. 

“This is a not a consultation on retirement protection, it’s just a bad attempt on poverty alleviation,” said Raees Baeg, assistant professor in social work at the Chinese University.  “It’s blackmail - if you want to have a universal scheme, you’re going to pay in taxes, which is a wrong representation.” 

Boycotting the government exercise, the academics will be holding their own discussion with civil society and also reach out to the middle-class and professional sector. The opinions they gather will be announced and presented publicly mid-next year - in time for the end of the government consultation. 

READ MORE: Retirement protection a human right: elderly hope after decades of contributions Hong Kong will take care of them

A war of words also erupted between Chief Secretary Carrie Lam Cheng Yuet-ngor and Chow yesterday.
“[Chow] does not fully understand the concept and management of public finances,” the city’s second highest-ranking official said in a radio programme.

Chow, whose study of retirement protection formed the blueprint for the government’s proposals, rebutted in a separate radio programme that he the government has consulted on such policy issues since the 1980s. He said he was angry the government altered the study it commissioned him to conduct.