Guarding the education floodgates
It is unfortunate that a major policy initiative to double the government's investment in kindergarten education has been faulted in some quarters merely because it is not to be extended to cover private for-profit kindergartens.
Chief Executive Donald Tsang Yam-kuen announced in his policy address that an additional HK$2 billion a year would be devoted to providing fee assistance to parents of children aged three to six, in the form of an 'education voucher', as well as measures to support school development and teaching learning. As a result, the share of pre-primary education expenditure within total recurrent education expenditure will jump to 6.3 per cent, from less than 3 per cent in 2005-2006.
Educationalists and some legislators have long been lobbying to include pre-primary education within compulsory education. However, the government has resisted, and instead, some schemes of limited assistance have been implemented, such as means-tested fee remission and direct subsidy to eligible non-profit-making kindergartens to help pay the salaries of qualified teachers.
By way of the proposed voucher scheme, the government has now in effect recognised the need to invest public funds to provide and improve pre-primary education, which will benefit 90 per cent of the pupil population. This is a major policy breakthrough.
The caveat, though, is that the scheme is confined to local non-profit-making kindergartens charging a tuition fee not exceeding 1.5 times the ultimate subsidy amount of HK$16,000 per year. This has triggered an uproar from profit-making kindergartens and some middle-class parents. They accuse the government of discrimination and contravening the free-choice principle of the voucher system. For-profit kindergartens also worry about losing out to subsidised non-profit-making counterparts.
The whole rationale of 'vouchers' is that taxpayers should be provided with essential welfare or public services (like education, housing and health care) in cash rather than in kind, because the market is more efficient in producing the services. To prevent recipients from misusing a cash benefit, a voucher only cashable for designated services is considered a practical way to marry welfare and market, which allows for consumer choice.
The logic of vouchers seems to support the argument that all kindergartens should be covered unless some of them, whether run for profit or not, are found to offer substandard services. If so, eligibility should be determined by service standards rather than the profit/non-profit divide.
Denying vouchers to profit-seeking service providers greatly limits their applicability. For example, there has been talk of adopting health vouchers as a form of health-finance reform. It is inconceivable that such vouchers should be used only to pay public hospitals under the Hospital Authority, which already receives government subvention, but not private hospitals and general practitioners so as to relieve the overburdened public sector.
However it is understandable why the government has not opted for such a fully fledged voucher scheme. All along, policy has clearly distinguished subventions directed at for-profit and non-profit-making organisations.
If private for-profit kindergartens were covered by the voucher scheme, this may open a floodgate with significant policy and financial implications for primary and secondary education sectors, where parents with children attending for-profit schools would likely lobby for a voucher following the same logic. This is bound to be more contentious, and may need to be considered within a much broader policy rethink.
Meanwhile, to make the voucher scheme as broad-based as practicable, the government should encourage kindergartens to convert to the non-profit-making mode. And it should adopt a more pragmatic interpretation so that those kindergartens which plough any surplus back into their operation could still be eligible.
Anthony Cheung Bing-leung is an executive councillor and founder of SynergyNet, a policy think-tank
