As the annual policy address draws near, Chief Executive Donald Tsang Yam-kuen has plenty to think about. As is customary, he would have been inundated with demands and requests from the consultation sessions held over the past couple of months. Then there is public anxiety about the global financial crisis, grim economic prospects and shrinking job market. If that's not enough to focus his thoughts, Mr Tsang is also coming off a string of opinion polls which suggest that the public is unhappy with his government over a range of issues including the political appointment of undersecretaries and political assistants, the debacle over the suspension of the maid levy and the row over the post-retirement employment of former housing chief Leung Chin-man. Early last month, a University of Hong Kong poll revealed that Mr Tsang's approval rating had dropped to 51.8 per cent, its lowest level since he took office in 2005. The dissatisfaction rate for the administration, meanwhile, had risen to 30 per cent, for the first time exceeding the satisfaction rate. Against this backdrop, Mr Tsang has a tough job on his hands to convince the public that - in his words - Hong Kong's core values have not changed and the effectiveness of his administration has not fallen. 'The chief executive should tackle the immediate and pressing livelihood issues such as the widening wealth gap,' said Joseph Wong Wing-ping, a former secretary for the civil service. 'He should also give a definitive position on the implementation of a statutory minimum wage. [Mr Tsang] should restore people's confidence in government by removing doubts about collusion between government and the business sector, political favouritism and the decline in the standard of governance.' Mr Tsang addressed the livelihood issue in July when he pledged an HK$11 billion relief plan. This followed a 2008-09 budget in which Financial Secretary John Tsang Chun-wah provided close to HK$40 billion in one-off or short-term measures for disadvantaged groups, as well as raising recurrent spending on certain services and giving tax concessions at a cost of HK$8 billion annually. It's a moot point whether the government has much leeway to provide further relief, given the gloomy economic outlook. The government was reported to have recorded a HK$36.2 billion budget deficit in the first five months of this year, and the shortfall for the year is expected to be HK$18.5 billion. 'The equity and property markets are falling, government revenue [from stamp duties] is expected to fall; the land premium from land sales was relatively low. As the outlook of the financial and real estate sectors is not optimistic, the government may have to present a deficit budget next year, and it would not have too much money left for handouts,' said Law Chi-kwong, associate professor of social work and social administration at the University of Hong Kong. The political benefits of one-off giveaways are limited anyway, as Chinese University political scientist Ma Ngok has pointed out. 'The chief executive should now learn that the effect of boosting his approval ratings by cash handouts is too brief to be worth the cost of doing so,' Dr Ma said. 'Doing nothing at all would be inconceivable in the current political climate, but the scale of the giveaways would not be in the order of billions, as in the previous cases.' Still, many legislators have vowed to press for an increase in the old-age allowance to HK$1,000. Those aged 65 to 69 currently receive HK$625 a month, while the over-70s get HK$705 a month. Mr Tsang had promised a review but the government is reluctant to budge, given the hefty price tag that comes with the proposal. In his budget speech, John Tsang cautioned that with an ageing population, the number of recipients would increase 21/2 times, to 2.17 million by 2033, costing an extra HK$9.7 billion each year at the current rate. Raising the ceiling to HK$1,000 would require an additional HK$4.3 billion annually. The government was considering raising the old-age allowance, but only on a means-tested basis, said James Sung Lap-Kung, a City University political scientist. 'The basic principle for introducing a means test is understandable as otherwise, the commitment would be bottomless given the fact that a quarter of the population would be over 60 years of age by 2033. But any attempt to introduce a means test would fuel a political storm,' Dr Sung said. The government has agreed only to provide additional one-off monthly payments to elderly people and set aside one-off funding of HK$200 million to help improve their homes in the next five years as short-term relief. The Society for Community Organisation, a church-backed group dedicated to helping the underprivileged, has pointed out that certain sectors of the community did not benefit from the previous handouts. They are described as the 'Five Nos' - those who do not pay electricity bills, do not receive welfare, do not live in rented public flats, have no children and are not elderly. The society urged the government to provide such people with transport subsidies and living supplements. Another grass-roots issue that Mr Tsang must address is that of a minimum wage. In last year's address, he promised to introduce a statutory minimum wage for security guards and cleaners in the 2008-2009 Legislative Council session if the voluntary wage protection movement failed. The latter is a voluntary scheme whereby employers are asked to pay cleaners and security guards no less than the median wage. As of August 31, 1,119 private enterprises or organisations were participating. The scheme's effectiveness is being reviewed. Though labour unions and some lawmakers are pushing for a statutory scheme covering all occupations, experts believe it won't happen. 'The chance of extending statutory minimum wages to other occupations is low because of the pressure from the business sector,' said City University lecturer Cheung Chor-yung. 'The government does not believe in the effectiveness of such measures either. It was only forced to take such a move due to the strong demand from some legislators and the labour sector.' Some economists, such as Francis Lui Ting-ming, of the Hong Kong University of Science and Technology, argue that a minimum wage will kill jobs and hurt those with least employability. However, reaction from business is not all negative. The vice-chairman of the Chinese General Chamber of Commerce, Ho Sai-chu said employers did not want to be accused of obstructing the minimum wage legislation, although they cautioned that the level must be set with care, given the worsening business environment. Unionist and lawmaker Lee Cheuk-yan said he hoped that Mr Tsang would commit to a statutory minimum wage and that the legislation would cover all occupations. 'The grievance bred from such inequity is not conducive to building a harmonious society,' Mr Lee said. 'Introducing a minimum wage should not hurt employers very much because only around 10 per cent of the workers are in the low-paid category.' Mr Lee feared the government would procrastinate. 'What I am most worried about is that the chief executive will insist on waiting for the evidence from a review of the wage protection movement to prove its ineffectiveness, and defer to the Labour Advisory Board for deliberation of the results before making a decision on whether or not to introduce the minimum wage bill,' he said. 'That would be the worst scenario.' If the government decides to introduce the legislation, Mr Lee said he would expect the bill to be submitted to Legco by next March, so that the law could take effect in the fourth quarter of next year. Some experts also suggested the government should not ignore the plight faced by owners of small and medium-sized enterprises (SMEs). Dr Sung said this sector expected the chief executive to introduce measures to help it face the worsening business environment and competition. Many are said to be withdrawing from the Pearl River Delta region in the face of intense competition and increased complexity in labour regulations on the mainland. 'Hong Kong faces intense competition from mainland cities and Macau in areas of tourism, the exhibition and convention sector, logistics and airport operations; and Hong Kong is losing a lot of talent to the mainland as its business service sectors expand,' Dr Sung said. 'Many SME owners hold deep grievances that the government has not been proactive in protecting their interests on the mainland. They would expect the chief executive to come up with initiatives to help Hong Kong industries through fostering cross-border co-operation. 'So far, the government has not been too proactive in collaborating with mainland authorities on cross-border projects such as the Lok Ma Chau loop development.' Helping hands In the previous budget, the government reached out to the poor with one-off and recurrent measures to relieve their financial burden, and these groups will be looking to Chief Executive Donald Tsang Yam-kuen to take more action in next week's policy address The five largest one-off budget pledges of most help to the poor Rates waiver for 2008-09: HK$11.2b HK$1,800 subsidy for each residential electricity account: HK$4.3b HK$3,000 grant for every old-age allowance recipient: HK$1.5b Extra month's CSSA payment and extra month's disability allowance: HK$1.2b One month?s rent for low-income families living in public housing: HK$1b The five largest recurrent budget commitments of most help to the poor Increase basic allowance, single-parent allowance and married person's allowance: HK$1,310m Widen tax bands to HK$40,000: HK$1,000m Lower standard salaries tax rate and tax under personal assessment to 15%: HK$960m Extra additional supplement to disability allowance recipients, and CSSA recipients with 100% disability: HK$230m Provide extra training places and residential places for the disabled: HK$100m