How the Hong Kong government can improve its transport subsidy scheme

Paul Yip says the new scheme is welcome, but to maximise benefits for the poor and disadvantaged in society, officials must be committed to monitoring and improving services by evaluating policy and using big data

Transport and logistics

Paul Yip

Published: 12:12pm, 18 Oct 2017

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It is pleasing to learn of the Hong Kong government’s new commuter subsidy scheme in Chief Executive Carrie Lam Cheng Yuet-ngor’s policy address. The scheme provides a subsidy to any commuter spending HK$400 a month on public transport on their Octopus card, with the government covering 25 per cent of further fares and the subsidy capped at HK$300 in savings per month.

The subsidy is expected to ease the burden of high transport costs and might also provide an incentive for low-income earners to enter the job market. The initial response from the community has generally been good.

Chief Executive Carrie Lam speaks to students about policy address initiatives in Aberdeen on Monday. Photo: Sam Tsang

Public transport to get cheaper for hundreds of thousands of Hong Kong commuters

However, based on the latest household survey for 2014-15, average spending on public transport (including the MTR, buses, ferries and trams) is only a small portion of overall expenditure, with housing and food still representing the major items of expenditure. It is estimated that the government public transport scheme could provide support to some 1.7 million people, at a cost of about HK$64 million a year. But our figures suggest that those in the lowest income bracket would not benefit from the scheme nearly as much as those in higher brackets, and 70 per cent of the subsidy would go to households with an income above the median level.

Total public expenditure as a share of GDP has grown substantially since pre-handover times. It is important to provide help and support for those who need it most, but we have to ask whether the money has been used effectively. Hong Kong has about 200,000 low-income working families and a high Gini coefficient of 0.539 as of 2016. No commuter is going to complain if they get a few hundred dollars a month extra through the subsidy, but what does HK$300 mean to a household in the top 20 per cent? A couple of free taxi rides?

Passengers wait for an MTR train at Choi Hung station in August amid delays caused by a signalling fault. Photo: Edward Wong

Will raft of social policies targeting elderly, poor and commuters ease Hong Kong’s problems?

The new administration should be applauded for its effort to improve quality of life. However, any responsible government must be prudent with expenditure and ensure every dollar counts. Proper evaluation of any government policy is essential. For example, the HK$2 transport subsidy for adults aged 65 and older has been well received, yet surprisingly there has been no study to examine how the subsidy affects the journeys of our elderly and whether it improves their quality of life. How many older people actively take advantage of the scheme? To make better policy, the government should examine its use in-depth.

There are a number of overseas examples which might also help the government put the transport subsidy scheme to better use. Seattle, in the US, for instance, aims to mitigate transport costs for low-income earners by maximising benefits for the needy.

Here, the current government has pledged to make Hong Kong a smart city that can assess policies objectively. This can be done by putting together an evaluation team, possibly a task for the revamped Central Policy Unit.

Hong Kong Tramways managing director Emmanuel Vivant and staff present a new tram logo at the Whitty Street depot. Photo: Dickson Lee

Here’s why Hong Kong’s commuting subsidy will hurt the people it’s supposed to help

It is important to make good use of public finance to develop targets and focus help on the vulnerable and disadvantaged groups in our society. This can only be achieved when the government has the commitment and mindset to monitor and improve its services. Making good use of the big data being captured by the Octopus card from the transport subsidy scheme might be a good starting point in improving social and public planning. It is equally important for the government to make the data available to researchers to provide insight that can help make Hong Kong a better place.

Paul Yip is chair professor in the Department of Social Work and Social Administration at the University of Hong Kong

This article appeared in the South China Morning Post print edition as: Who really gains from scheme to subsidise our public transport?

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