Editorial | Transport subsidy proves yet another rough ride for Carrie Lam

A HK$2 transport subsidy scheme for those aged 60 and above may seem like a drop in the ocean for affluent Hong Kong. But the much-anticipated proposal has become the latest setback for embattled Chief Executive Carrie Lam Cheng Yuet-ngor, after her cabinet reportedly challenged it because of the long-term financial burden. In question are not just elderly welfare and fiscal prudence, but also Lam’s credibility and governance. She has to garner broad support to deliver without compromising financial health and sustainability.

The public is understandably dismayed, having waited for more than nine months only to be told the concession may be delayed or even shelved. Political parties seeking positive news to shore up their election campaigns next year are also up in arms, after details of a confidential discussion at a meeting of the Executive Council a week ago were leaked. On Saturday, Secretary for Labour and Welfare Law Chi-kwong reiterated the scheme had not been shelved. However, it still faces being delayed.

Introduced in 2011, a concessionary fare of HK$2 per ride for the disabled and those aged 65 and above aimed to ease the burden of the disadvantaged and nurture an active lifestyle. In January, Lam surprised many with a pledge to lower the qualifying age to 60, and benefit 600,000 more people at an extra annual cost of HK$1.7 billion.

Notwithstanding the enviable HK$1.1 trillion in reserves at the time, the announcement met with serious concerns over the long-term financial burden. About one-third of the population would be entitled to the subsidy by 2030. Nine months into the coronavirus pandemic, such worries loom larger with relief and stimulus measures having lowered public coffers by more than a quarter.

The subsidy has always been controversial. While it would come as a great relief to those who are eligible, the tendency to put back retirement age means many of those to benefit would still be working. As government funds would eventually end up in the pockets of profit-making public transport operators, this has raised questions over the use of taxpayers’ money.

The extended concession was seen as a policy U-turn by Lam as part of a surprise HK$10 billion spending spree to help boost her popularity. The package, including an undertaking to standardise statutory public holidays for white- and blue-collar workers, was said to have been dictated by Lam without her going through the usual internal deliberation process. The setbacks over the subsidy and holiday initiatives are the latest examples of Lam being caught between a rock and hard place. She still faces the challenge of making good her promise without compromising good governance.