CY’s Last Call: Business looks at the Policy Address 2016

Population, Welfare & Labour: Facing the challenge of an aging population

If the current administration still has much to do in the development front, then the outstanding hurdles in Leung’s previous proposals in the arena of labour and welfare are anything but easily surmountable.

In light of the relaxation of One-Child policy in the mainland, Leung is expected to follow the line and put an emphasis on population policies. The according initiatives will likely centre around providing support to families, especially women, and will be presented in a way that encourages child-bearing.

A notable accomplishment among Leung’s welfare initiatives is the implementation of the Low-Income Working Family Allowance. An ageing society, a favourite talking point of the FS John Tsang, suggests that Leung will put forward policy incentives to encourage senior citizens who are able and willing to work to stay in the workforce by extending the Low-Income Working Allowance to working seniors.

That being said, there is hardly any way out for the three most significant welfare and labour measures, namely the universal pension scheme, the MPF offsetting mechanism and the standard working hours (SWH) legislation amid strong oppositions in the public.

The consultation for the pension scheme was launched in December, 2015, but the government has been widely criticised for lacking the sincerity to introduce a genuinely universal programme. Indeed, a recent government briefing document clearly states:

“In a nutshell, the Government has reservations over any options that are not means-tested and apply equally to all the elderly regardless of being rich or poor.”

In other words, the Universal Pension Scheme is a dead letter. Move on.

Neither employers’ nor employees’ representatives are showing any sign of compromise regarding abandoning the MPF offsetting mechanism or enacting SWH legislation. In addition, an automatic mechanism for adjusting the minimum and maximum levels of relevant income for MPF mandatory contributions was halted owing to a last-minute bombardment of objections approaching the end of the consultation period. Leung will probably raise the topics again in the policy address, but expectation on the government truly delivering something would remain low. Consultation and study will be the non-plan for now.

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Alex Fok is a Harbour Times journalist monitoring Hong Kong’s daily political scene and diplomatic updates. He obtained his bachelor’s degree in Economics, Politics and International Studies from University of Warwick and his master’s degree in International Relations from the London School of Economics and Political Science. He is a former committee member of the Warwick-based Hong Kong Public Affairs and Social Service Society (WHKPASS) and was the chief editor of the society’s magazine – PASSTIMES.