A business group’s report directly addresses inequality in Hong Kong; it suggests that the government should do the same.
The Business and Professionals Federation of Hong Kong (BPF), a non-partisan think tank, published a report in November addressing Hong Kong’s financial model and how it has made the city “one of the most unequal economies in the rich world”.
Victor Apps, Chairman of the group, criticised the government for failing to directly address the stark economic inequality prevalent in the region’s economy.
“[Hong Kong’s] financial model, with its reliance on high priced housing and commercial space, has generated surpluses. The people the government listen to are mostly the beneficiaries of the system that taxes the rich so lightly. Inequality is simply not on the government agenda.”
This report, entitled “Hong Kong at a Crossroads – Inequality must be Reduced Now”, identified five significant contributors to the region’s inequality: housing, low wages, CSSA payments, MPF pensions, and tax sources.
There are six main factors as follows:
- Building more housing at “about triple the rate” the government has planned on brownfield, agricultural land, and even parts of country parks.
- The privatisation of public rental housing to allow tenants to benefit from the appreciation in Hong Kong’s property values.
- Providing supplements to low-income workers based on their level of need. Supplements ranging from HK$500 to HK$6,000 per month would be allocated to individuals depending on their income and housing.
- Adding HK$5 billion to the CSSA budget – a 25% increase on current expenditures which would go in large part to the elderly poor.
- MPF contribution levels should be increased from 10% to 15%, split in even percentages between the employer, employee, and the government. Currently, the government does not contribute to the MPF.
- Adding income sources not currently taxed in the system, while not increasing salaries tax rates.
Out of these suggestions, the report emphasised numbers 3-5 on the above list as major initiatives the government can take to ameliorate HK’s economic inequality.
“We felt the need to focus on the major [factors],” stated Victor Apps, Chairman of the BPF. “We chose from these some recommendations that were actionable in the short term. That does not diminish the importance of the others.”
In order to execute these recommendations, it would cost a total of HK$90 billion per year, which BPF proposes the government finance using Hong Kong’s HK$1,200 billion financial reserves.
BPF is a non-partisan think tank made up of a group of businessmen and professionals who are committed to “put[ting] the overall interests of Hong Kong above those of individual sectors.” The late Sir David Akers-Jones, former Chief Secretary of Hong Kong, served as the President of the group since its inception. The full report can be accessed on BPF’s website.
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