HK$10 billion welfare package signals a seismic shift in Hong Kong government’s priority
- The long tradition of putting fiscal responsibility above all else and keeping Hong Kong business-friendly at all costs is changing as the government shows a greater willingness to redistribute wealth, look after those in need and give everyone a fairer deal
On Tuesday, the Hong Kong government announced a package of 10 initiatives aimed at helping the elderly and less well-off. The measure that has perhaps attracted the most attention is the cut in the age at which people become eligible for the HK$2 (about 25 US cents) concessionary fare for public transport. This will benefit some 600,000 people, and hopefully help many continue to work or simply keep in touch with friends and family.
But, to many of us, these measures represent significant breakthroughs. Several political and welfare groups have been calling for such initiatives for years. The Hong Kong Council for Social Service – of which I am chairman – is one of them, and we are very pleased indeed.
For example, a retiree with HK$1 million in assets can convert half of that into a public annuity yielding HK$2,650-HK$2,900 a month, and still be eligible for the HK$3,585 allowance. So someone who still has HK$500,000 in assets (the new eligibility cap) can enjoy a pension income of over HK$6,000. This will benefit quite a few elderly people, and be especially attractive for someone who spends time on the mainland.
The government has now committed to finding ways to cut through the administrative problems. This is a bold step.
This proposal has always met strong resistance from employers, and officials have got nowhere because of a lack of consensus. They are now saying that this is unfair and must end. The change will be gradual, but ultimately employers will simply have to adjust.
The world is paying too a high price for inequality
This package shows a willingness to redistribute more wealth to those in need, to relax rules on eligibility for benefits, to push departments harder to solve housing problems, and to give workers a fair deal even when there is opposition from other parties. The real message here is that government can change. This is a good sign for the future.
Bernard Chan is convenor of Hong Kong’s Executive Council