Sooner or later, Hong Kong will have to redefine what it means to be poor

Arguments over how to draw the poverty line are missing the bigger picture: how to allocate scarce resources to ensure social equity

PUBLISHED : Monday, 02 May, 2016, 9:28pm
UPDATED : Monday, 02 May, 2016, 9:28pm

The number of Hong Kong people classified as living in poverty was reduced to less than one million in 2014, thanks to government handouts and subsidies that lifted more than 350,000 above the poverty line introduced three years ago by Chief Executive Leung Chun-ying. In a population of seven million, that remains a significant challenge to efficient use of resources, which prompted the government to revisit a sensitive issue of principle – whether subsidies paid to public housing tenants should be taken into account in determining who is poor. They were excluded after debate when the poverty line was introduced. If it were redrawn to include them, the government calculates the number classified as poor would be reduced by a third to about 640,000.

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The question came up at a recent closed-door meeting of the Poverty Commission. Timing can be everything in politics, and it is doubtful this is a good time to stir up division by meddling with the definition. Elections are coming up, the global economy is slowing, and poverty and inequality are burning issues. The government was only inviting political trouble by proposing a revision that would have put more than 300,000 public housing tenants above the line. Rejection by the Poverty Commission may therefore be a blessing.

The poverty line defines the poor simply as those earning less than the medium monthly household income. The proposed revision reflected a view among officials and establishment politicians that there is room for more efficient use of resources to address inequality, but welfare activists and pan-democrat politicians saw it as a tactic to reduce the official number of poor people. The inclusion of public housing subsidies would not have been straightforward. For example, it would involve market rents and rents paid by public housing tenants in different districts. And the question also remains whether rental subsidies to make housing affordable to the poor should be compared with other government support payments.

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Among a number of sensitive political considerations to be taken into account are the grievances of the middle class, whose private housing costs can leave them worse off in terms of disposable income than those in subsidised public housing. In this respect, many in the middle class feel they have been forgotten in calculations of the poverty line. While this may not be the right time politically to change the poverty line, it may be an issue that needs addressing in terms of social equity.