WELFARE CUTS WILL LEAD TO MORE PEOPLE LIVING BELOW POVERTY LINE

The Secretary for Health, Welfare and Food, Yeoh Eng-kiong, has cautioned that Comprehensive Social Security Assistance (CSSA) payments might be trimmed in April (South China Morning Post, January 12).

While expenditure cuts are inevitable given the huge budget deficit, the rationale put forth by the secretary for cutting welfare payments is totally unsound.

Dr Yeoh said that it was 'impossible to make a very generous [CSSA] payment out of the existing low tax rates and narrow tax base'.

It has been pointed out that a mere one per cent increase in our salaries tax, profits tax and rates, and another 10 per cent decrease in salaries tax allowance would generate $10 billion for the treasury for the coming financial year. This would go half way towards meeting the government's target to save $20 billion. While most people do not want to see drastic changes to our tax system, minor adjustments made to the existing tax rates would not trigger an uproar.

Similarly, in times of economic constraint, it is reasonable that our tax base should be extended beyond the 36 per cent of our 3.3 million working population. An enlarged tax base not only boosts the public coffers, but also falls in line with Chief Executive Tung Chee-hwa's appeal for all sectors of the community to share the economic burden. Given the positive response to new charges on emergency services in hospitals, Hong Kong people have generally accepted the principle that those who can afford to, should pay.

Indeed, when it comes to making savings, welfare benefits cuts should be seen as a last resort. Contrary to what Dr Yeoh claims, financial aid for CSSA recipients has never been 'generous'. Even in times of economic prosperity, the sums given out kept the poor at subsistence level. Many people are still falling through the safety net, judging by the growing number of individuals living below the poverty line and the yawning gap between the rich and the poor.