Sunday, 27 December 2015

Scaring Hong Kong on Cost of Universal Pension

A number of elderly make extra cash by collecting cardboard and recyclables
Hong Kong Chief Executive Leung Chun-ying election platform back in 2012 included setting up a fund for the elderly, but the government seems to be scaring the public into thinking implementing such a scheme would be too expensive.

We have been hearing lots of stories of elderly residents who are too poor to look after themselves despite having worked very hard all their lives. Some are too proud to ask for welfare, others are borderline cases that aren't eligible for social assistance.

There was talk of giving more money to those who needed it, but then they would have to undergo some kind of means test to confirm they qualified for the extra funds. Then there was the issue of assets -- someone may own a flat, but not have enough cash monthly to buy food to sustain themselves -- did they qualify?

Chow proposes a universal pension paid by the government
The government got University of Hong Kong Professor Nelson Chow Wing-sun to conduct a study and in August he proposed those over 70 years of age should get a pension of HK$3,230 per month and paid for by the government at a cost of HK$7 billion per year.

He said the government should pay for it because people would be reluctant to pay into the scheme, mostly because of disillusionment with how the Mandatory Provident Fund, a mandatory savings plan, had failed miserably -- people's funds are losing value instead of gaining.

Then about a week ago the government presented two different pension plans for public consultation. One was a non-universal plan where one person living alone could not have assets more than HK$80,000, while the other was Chow's idea. The government claimed that to pay for the scheme, taxes would have to be raised.

At the same time Chief Secretary Carrie Lam Cheng Yuet-ngor seemed to want to distance the Leung administration from Chow, saying what he was proposing was only a report, and turning it into policy was another matter.

This angered Chow, who has consulted the government on retirement issues since the 1980s. He held his own press conference for the first time in 30 years asking: "If the government's stance is that it does not want to implement a universal retirement scheme, why does it want to consult the public?"

Carrie Lam claims the scheme would mean increasing taxes
Lam fired back saying the academic "does not fully understand the concept and management of public finances".

If Chow is unqualified to understand funding of public services, then why has he been advising the government for over 30 years?

The Hong Kong government coffers are at over HK$730 billion. Why can't Hong Kong afford to pay for a universal pension scheme of HK$7 billion a year?

Do we want more stories of elderly people sleeping in McDonald's because they can't afford a place to live? Isn't the government ashamed it isn't doing enough to help these people?

Apparently not. If Beijing is meddling more in Hong Kong affairs, surely China would encourage the city to have a universal pension scheme... at least that would be one good thing about being "mainlandized"...

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