25 October 2016
By supporting the VHIS, Secretary for Food and Health Ko Wing-man is showing favor to fellow private doctors and insurance firms. Photo: RTHK
By supporting the VHIS, Secretary for Food and Health Ko Wing-man is showing favor to fellow private doctors and insurance firms. Photo: RTHK

The Voluntary Health Insurance Scheme: A medical tax in disguise

Despite the fact that the lead contamination scandal in public housing estates is still in full swing, and the threat of contaminated agricultural products imported from Tianjin is looming over the city, Secretary for Food and Health Ko Wing-man doesn’t seem to be bothered about these issues at all and has taken no precautionary measures against them whatsoever.

Instead, he appears to be preoccupied with something else, which happens to be the Voluntary Health Insurance Scheme (VHIS) proposed by the government that has drawn widespread skepticism among the middle class.

Recently he has given an interview to local newspapers talking utter nonsense about the plan, and what he said has simply raised more questions than answers on the issue.

After Ko had left the Hospital Authority in 2004, he went into private practice as a bone surgeon, and it is very likely that he will go back to private practice again after he serves out his term as Secretary for Food and Health.

Therefore, his act of pitching the VHIS so eagerly actually constitutes a conflict of interest between his position as the government’s health chief and his professional background, and the reason why he is doing so is all too obvious.

Ostensibly, he is so much in favor of the VHIS because he claims it can help alleviate the growing pressure on public health spending in face of an aging population.

The truth is, however, he is actually showing favor to his fellow private doctors and insurance companies by transferring patients who are supposed to be taken care of in public hospitals to the private medical sector, offering them extra business opportunities that are worth billions of dollars.

Simply put, the VHIS is nothing but a medical tax in disguise targeting the middle class.

Many people in Hong Kong are under the impression that we are so lucky to have the benefit of a simple and low tax system, and all we need to pay is a 15 percent income tax, which is far lower than any other developed country.

However, as I have pointed out repeatedly in the past, the invisible tax burdens on our citizens, particularly the middle class, are in fact much more severe than we think.

For example, the long-established high land price policy adopted by the government has led to skyrocketing property prices and soaring rents in the city.

Both working class and middle class families have bore the brunt of it, as they have to devote a large chunk of their incomes to either rents or mortgages every month. These expenditures actually amount to a form of invisible real estate tax.

To make matters worse, the people of Hong Kong are also subject to another form of indirect and inescapable tax, which is our daily transportation expenses.

Our public transport system has in effect been monopolized by the MTR and a few other bus service providers, and their fare hikes have basically gone unchecked.

You are even worse off if you are a middle-class motorist, as you are subject to an awful lot of unreasonably high expenses such as import tax, car registration tax, vehicle licensing fees, parking fees and above all, high gasoline prices.

Over the years, the administration has been whining about the narrow tax base in Hong Kong, and has made repeated attempts to introduce the sales tax. It would have succeeded in doing so had it not been for the fierce opposition from the public and the business sector.

The VHIS that the seemingly righteous, highly popular and noble Secretary Ko is currently pitching so eagerly is in fact no less destructive than the infamous sales tax.

It is important for us to note that the public welfare provided by the Hong Kong government has always been the bare minimum only. For the middle class families who are already suffering from a wide variety of hidden and indirect taxes, they are not entitled to any kind of social benefits except for the 12-year free education for their kids.

All the VHIS does is further increase their tax burdens.

Why should middle class families bother to keep paying income tax when our government that has trillions of dollars in reserve is continuing to take away their welfare entitlements bit by bit sneakily in every possible way?

Once the VHIS is implemented, a lot of non-emergent surgery and treatments for chronic diseases will be outsourced to private hospitals and doctors.

Middle class families will have to pay a lot more for these services which used to be provided by public hospitals at a much cheaper rate. Isn’t it just another kind of daylight robbery?

I urge every fellow citizen in Hong Kong to firmly oppose the VHIS, no matter how our officials sugarcoat it, because it is just another tricky attempt by the Leung Chun-ying administration to pass the buck and collude with big businesses at the expense of public interest.

The article first appeared in the Hong Kong Economic Journal on Aug 21.

Translation by Alan Lee

[Chinese version 中文版]

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Former radio talk show host; Columnist at the Hong Kong Economic Journal

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