Tax rises ‘unavoidable’ if everyone over 60 gets a pension, warns Hong Kong treasury chief
It would cost more than HK$50 billion annually after 30 years and hurt the city’s competitiveness, warns Professor Chan Ka-keung
A universal retirement protection proposal that would benefit every elderly person is not financial feasible and would add pressure to the government’s budget, making tax increases unavoidable.
That’s the verdict of Professor Chan Ka-keung, Secretary for Financial Services and the Treasury. In his blog yesterday, Chan warned that any policy suggestions to enhance retirement protection would “add pressure on the government’s budget” and the rise of taxes would be “unavoidable”.
“If the principle of ‘regardless of rich or poor’ is adopted, a uniform financial assistance is provided to all elderly. Measured by today’s prices, after 30 years, the additional annual expenditure will be over HK$50 billion,” wrote Chan.
He was referring to a universal retirement option in which the government hand out HK$3,230 a month to all Hongkongers aged 65 or above regardless of their incomes or savings.
“That’s nearly equal to today’s total recurrent expenditure on social welfare or health care. [It’s] financially unfeasible,” he said.
READ MORE: New Year’s Day protest march to focus on Hongkongers’ retirement protection and ending ‘white elephant’ projects
According to Chan, there are now 15 people aged 65 or above for every 100 people in Hong Kong. He estimated that the proportion would double to 30 elderly people to 100 people by 2046.