Equal opportunity essential in Hong Kong poverty fight

News items reflect the dilemma of a wealthy, ageing society that blunders into a trap through the lack of a coherent retirement income policy and planning

PUBLISHED : Thursday, 23 November, 2017, 1:10am
UPDATED : Thursday, 23 November, 2017, 1:10am

Hong Kong has long since learned to its cost that waiting for the so-called trickle-down effect of economic prosperity to address economic inequality further down the ladder is futile. Now it is learning that an ageing population can make the problem of poverty much worse. Two recent news items demonstrate the dilemma of a wealthy, ageing society that blunders into a poverty trap through the lack of a coherent retirement income policy and planning.

Poverty in Hong Kong could worsen despite handouts, minister warns

First, we reported official figures showing the number of impoverished Hongkongers hit a record high last year, with one in five living below the poverty line. This prompted questions regarding the effectiveness of poverty alleviation measures by the government and reinforced the view that the grass roots do not benefit from economic growth. One bright spot was that the 1.35 million of the 7.35 million residents living below the official poverty line came down to just under one million after taking into account government benefits such as Comprehensive Social Security Assistance and the Old Age Living Allowance schemes. The poverty line is drawn at half the median monthly income according to household size.

But then came a second report in which Secretary for Labour and Welfare Dr Law Chi-kwong admitted that the number of poor could exceed one million next year even after government cash handouts. The increase was in line with a rise in 2015 that followed a modest downward trend from 2009 to 2014. Understandably, the welfare lobby has called for the government to take steps such as raising the minimum wage to help the working poor, and introducing a non-means tested universal retirement scheme.

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Both suggestions are contentious. As a result, those pessimistic about reducing poverty in the short term tend to focus on the next generation, and how to save it from an intergenerational poverty trap. That raises the issue of how government support should be divided between meeting a family’s basic needs and ensuring poverty does not deprive children of grass-roots families of the opportunity to build a better life. The purpose of the poverty line is to help the government assess the problem and better allocate money, for example by targeting equal opportunity for grass-roots children, such as through access to activities or learning aids. It is a worry that the situation of these children has apparently not improved much. Equal access will enable the next generation to enhance its own prospects and empower those from the grass roots to influence their own fate. Meanwhile, as the population gets older, more people can be expected to fall beneath the poverty line.