An unpopular tax is generally a bad one. The domestic helpers' levy, troubling in both fairness and logic, was no exception when introduced in 2003. It was effectively financed by an equivalent cut in the wages of foreign maids, among the lowest-paid people in society, who were made to share the pain in the hard times following Sars. Many hard-pressed middle-class employers cut their maid's pay to subsidise payment of the levy which, in turn, was used to fund the Employees Retraining Board. One of the rationalisations put forward for this was that some of the money could be used to train local people to be maids.
How much that was wishful thinking has become clearer. The retraining board says that while about 120,000 people have passed its housekeeping and post-natal care courses - surely enough to provide housekeepers for anyone who wants one - more than half the requests for domestic housekeeping services and helpers for new mothers have not been met. Companies and social organisations that match local helpers with employers also say they have difficulty recruiting workers. It turns out that many trainees are housewives who joined the courses for something to do and pocketed training subsidies - ranging from HK$1,500 to HK$2,000 for two weeks - without any intention of taking jobs.
The levy raised nearly HK$5 billion for the board before it was suspended in 2008. By then the maids' minimum pay had crept back up and their employers were increasingly out of pocket.
Retraining equips people with more employable skills, and cannot be judged solely by whether they all get jobs. The board is reluctant to tighten the rules for fear of rejecting people in genuine need. But in this case a harsh social trade-off - one person's pay to subsidise another's job training - seems to have been casually abused. There are better ways to finance job schemes. And - so long as genuine participants are not rejected - subsidised job-training should be subject to value-for-taxpayers'-money audits.