Hong Kong government should offer a third option on retirement scheme
Since the introduction of the Mandatory Provident Fund (MPF) in 2000, retirement protection efforts have largely come to a standstill. While concern over the accrued returns of our MPF contributions is loud and clear, nothing much has been done to strengthen the existing system.
It is reassuring to see the government broaching the issue for public discussion.
Two proposals were tabled for discussion. The first option, advanced by University of Hong Kong social work professor Nelson Chow Wing-sun, considers retirement protection a basic right. With no means test, elderly members reaching a particular age are entitled to a monthly stipend. The hefty expenditure would mean either an increase in profits and salaries taxes or the introduction of new levies such as a goods and services tax.
Unsurprisingly, the public are taken aback by its grave financial implications. Their resistance, however, seems to be a far cry from their quest for more extensive protection, which inevitably entails substantial costs to be borne by all.
The second option, which operates on a needs basis, involves a lower cost. Applicability will be assessed based on the poverty situation of the elderly. The proposal is said to adhere to the long-standing “one supporting oneself” principle and core values of self-reliance. However, the proposal is nothing more than yet another gesture for poverty alleviation. It is far from the intended goal of universal protection.
In juxtaposing the two options, the government has unwittingly, if not subtly, demonised the first option by stressing its low financial viability. The forgone conclusion is that the government is incentivising the public to make do with the second option.
That the first option is unwelcoming because of its prohibitive tax hikes should not make the second option more palatable. After all, the second option deviates from what the public has been calling for and it falls short of the notion of universal protection. The consultation exercise seems to have dissolved into yet another false dilemma. While issues of ageing population and shrinking workforce are pressing, the public should not feel obliged to choose the lesser of the two evils.
With the discussion gaining momentum, the government should capitalise on the opportunity to “forge ahead”, as how the consultation document is rightly entitled. To say we are looking for a consensus, it is more realistic to thrash out a third option accepted by the majority.
Borromeo Li Ka-kit, Happy Valley