Special elderly allowance is not meant for all senior people
Updated: 2012-10-12 07:11
By Violetta Yau(HK Edition)
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With the dust settling on the national education debacle, the government may naively think that it can now relax and shift its focus to more meaningful issues. The curtain, however, is rising on a new round of political battles, as the Legislative Council began its new four-year term on Wednesday, and the administration's political foes are all geared up for action.
The welfare of the city's elderly, in the form of a HK$2,200 old age living allowance per month, unfortunately takes center stage in the upcoming tussle. If anything goes wrong with this enhanced allowance when put to the vote at LegCo on Oct 26, the welfare of the city's elderly will be put at stake.
In fact, no one can dispute that this special elderly allowance is a well-intentioned initiative that should be applauded and welcomed. A living allowance of HK$2,200 a month for those aged 65 or above is a reasonable amount to support those in need that no one could dare to object. The subject of dispute, however, is whether a means test should apply in this new scheme to identify those who are truly in need of more public assistance.
From the government's point of view, a means test is necessary because the new scheme is aimed at alleviating the plight of the poor and needy who are elderly, instead of handing out money as a "token of respect" for the elderly indiscriminately, as under the existing old age allowance scheme called "fruit money". But for the opposition camp and some pro-government unionists, a means test is actually a mean and insulting procedure to the city's elderly because they should not go through such a hassle in order to get what they deserve for contributing to society all their lives.
If at present those aged 70 or above are entitled indiscriminately to the HK$1,090 fruit money per month, why should they be subject to a means test for this special allowance? The opposition camp goes further attempting to turn this special allowance into a universal retirement protection scheme. Some even threatened to resort to their notorious filibustering tactics again, until the government backs down and waives the means test.
Objectively speaking, the means test criteria are lenient and enough to cover those who are in need. The income cap is HK$6,600 a month for a single person and HK$10,520 a month for a married couple with an asset limit of HK$186,000 for a single person and HK$281,000 for couples. Financial support from family members as well as the applicant's self-occupied property will not be taken into account. If the plan can get the go-ahead from LegCo, about 400,000 out of 980,000 seniors will benefit from the special handouts, entailing an additional expenditure of HK$6 billion a year. The ineligible aged 70 or above can still be entitled to the fruit money.
However, if the means test is waived, the government will have to dish out an extra HK$7 billion or even more for the new allowance every year. We have to bear in mind that once a means test is waived, there will be no turning back. Given the fact that the problem of an aging population continues to plague the city, without a means test the annual payout may become an unbearable burden for taxpayers. According to government projections, the number of elders aged 65 or above will surge to over 2 million by 2031, and the cost could be astronomically high.
Most importantly, what is the purpose of this special allowance? If its purpose is to alleviate poverty and help the elderly poor financially, is it fair for this allowance also to benefit the wealthy elders at the expense of taxpayers' hard-earned money? In fact, the memory of the controversial HK$6,000 cash handouts to every Hong Kong adult by Financial Secretary John Tsang last year is still vivid in many people's minds. Public money should be used fairly, sensibly and reasonably, and not be spent for the sake of winning one-time public applause. The government has the responsibility to keep a prudent budget as laid down in the Basic Law and avoid following in the footsteps of the US and Europe, by spending extravagantly ahead of earnings and eventually running into debt crises.
More pathetically, there is a growing trend towards populism as politicians use it as a tool to please their voters and fight for more popularity. As responsible politicians, they have the duty to ensure that public money is well-spent to ensure sustainable public finance, and not to oppose the government just for the sake of undermining its governance. Yes the idea of a universal retirement protection scheme is worth pondering, but to turn this special allowance into a universal pension scheme would be too far-fetched and frivolous. We need a thorough public debate on this issue to work out the details. The government should stand firm this time on what is right.
The author is a current affairs commentator.
(HK Edition 10/12/2012 page4)