Effective ways to address poverty
Updated: 2016-05-05 08:00
By Peter Liang(HK Edition)
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Peter Liang explains why the government's recent attempts to deal with the problem of poverty have sparked protests from the very people these measures aim to help
The government has shown its resolve and sincerity in addressing the poverty issue by introducing a number of major initiatives to bring relief to the poor. Concurrently, it is canvassing public opinion in reviewing woefully outdated labor regulations, which are widely seen to be unfavorable to workers.
These efforts surely deserve widespread public support, don't they?
Wrong. Nearly every proposal, including the redrawing of the poverty line to ensure that limited resources are going into the hands of those who need help most, has stirred a storm of protest from the very people they are seeking to help.
Meanwhile, workers' representatives have boycotted the advisory committee on standard working hours and thousands of workers took to the streets on Labour Day to protest against, among other things, the proposed watering down of a universal pension scheme.
It can be expected that the protests will get louder and demonstrations more frequent in the run-up to the Legislative Council election in September, as politicians of various different parties are stepping up their efforts to win over the voters. Every politician understands that the surest way to win votes is to show how hard he, or she, has tried to get something for the voters from the government.
The political environment has created the impression that the government cannot do anything right. Of course, this is unfair. After drawing the poverty line for the first time several years ago, the government has since greatly increased its spending on social welfare, which has greatly increased the benefits to many thousands of poor families and elderly retirees.
In addition, government spending on healthcare has also increased substantially in recent years to catch up with escalating medical costs. To be sure, the long wait for treatment at public hospitals has tested the patience of many patients. But the quality of Hong Kong's public healthcare services is envied by many people in the region.
The problem is that the benefits of each of the many different social and medical service initiatives are being evaluated individually by people. Unsurprisingly, they have failed to make as convincing an impression in the minds of the people as they would if they were seen as a whole.
What the government needs is not to present its social welfare efforts on a case-by-case basis. Rather, it should group all its efforts under one policy initiative. This would show the true scale of the total government expenditure on welfare. This way, it can silence critics who like to pick on individual items one at a time and then claim the government is being stingy.
A major item that has often been excluded from the government's overall welfare efforts is public housing. About half of the population is housed in low-cost apartments in various housing estates built by the government. In land-scarce Hong Kong where property prices are among the highest in the world, the tenants of low-cost housing estates must count themselves as the biggest beneficiaries of welfare.
A case in point is the recently completed refurbishing of a multi-story factory building into a residential complex with apartments of various sizes for rental at below market rates to qualified single tenants and families. Rent for a typical unit in the project designed for a family of four is set at about HK$2,700 a month. This compares to the average rent of HK$15,000 for a similar-sized unit in a private housing estate in the neighborhood.
The government has made housing development a policy priority to address the shortage that was blamed for pushing property prices to levels that only the affluent could afford. In fact, increasing the supply of affordable housing should be seen as the most effective, if not the most direct, way to combat poverty without incurring an increase in recurrent expenditure, which could lead to higher taxes.
Many families are poor because they have to spend too large a share of their incomes on housing, leaving little for them to spend on anything else. Therefore, the government should stick to an earlier proposal to redraw the poverty line by taking public housing into account rather than shelving it in the face of stiff objections.
By any measure, rental subsidies are a welfare benefit. If the government's ambitious housing scheme is a success, there will be little need to increase other benefits. It will also make a much more convincing case for a sustainable pension scheme that limits its coverage to those most in need.
The author is a veteran current affairs commentator.
(HK Edition 05/05/2016 page9)