Opinion | Planning for an ageing population means no blanket payouts for elderly

Are the pro-democracy parties that oppose means testing of allowances for those over 70 years old really interested in the welfare of the poorest? Are they opposing the government for the sake of it, or do they believe their voters are those in the middle-income bracket, not the old folks who get entertained by the Democratic Alliance for the Betterment and Progress of Hong Kong?

The largest percentage of poor people is found among the elderly. We should remember why that is. Many of those who worked hardest in the 1960s and 1970s to build this economy are now facing penury, trying to make a living by gathering rubbish at 80 while the civil service retires on a full pension at 60. The biggest divider is ownership of property and shares. Mass private ownership of flats did not begin till the mid-1970s. Then, high down-payments and 12- to 15-year mortgage repayment terms excluded those already well into middle age.

The nearly 50 per cent of the population who were never able to buy a flat have seen their savings eroded by the interest rates on deposits that in most years fell below inflation. Owners of property and shares benefited, the other half of the population suffered. With interest rates now so low, even a couple who managed to save HK$1 million now get a return of almost nothing. Meanwhile, those on the property bandwagon benefit from those low interest rates and get income tax breaks as well.

For sure, roughly half the population was and remains partly protected by cheap public housing and health care. But cash income is necessary for those who are no longer able to work. For those who lack family support in old age, the situation is especially dire. For all the talk about Chinese family values, reality is too often different. Offspring may have meagre incomes themselves, have migrated or have flats too small for their parents. Like it or not, Hong Kong has followed the Western pattern of unitary households.

These problems are not all of the government's creation. Some stem from the dollar peg as well as the creation of an artificial land shortage. But the government has a particular obligation to provide much more help for those most hurt by circumstances not of their own making. It is a selective obligation, not one applicable to all. Instead of blanket payouts, focus on specific needs, not just on the elderly but also for the next generation.

This is not just a question of achieving fairness now, taking an affordable and practical step to reduce inequality. It is one of preparing for a future in which the percentage of the population over 65 is expected to rise from 13per cent today to 23per cent by 2026 and the ratio of dependent elderly to the working population will rise from 0.18 to 0.35.