The government recently released a public consultation paper on its proposed universal retirement scheme.
From the contents of this paper to its wording, its analysis and the options it provides, I have enough reasons to believe the paper is intended to lead our fellow citizens to give up their hope for a non-means-tested universal pension scheme and accept an enhanced version of the Old Age Living Allowance instead.
With all due respect, I believe the government is deliberately misleading the public or even generating class conflict by offering two mutually exclusive alternatives: the “regardless of rich or poor” option and the “those with financial needs” option.
What the administration is trying to do is lead the public to buy into the notion that retirement protection is just another form of old-age allowance for the elderly poor.
And so, it suggests, an enhanced version of the existing Old Age Living Allowance in which anybody over 65 with a net worth of less than HK$80,000 will be eligible for a monthly allowance of HK$3,250 should be enough to meet the needs of our aging society.
The biggest problem with the government proposal is that it has turned the Old Age Living Allowance, which was supposed to be just a transitional measure, into a permanent alternative to a universal retirement protection scheme, and the HK$80,000 asset limit that it imposes will only lead to never-ending disputes among society.
No matter whether the limit is set at HK$80,000, HK$100,000 or HK$60,000, there will always be a significant portion of our elderly population who find themselves left out of the social safety net, and their indignation will grow, as they feel they are being penalized just because they have saved some money in their bank accounts for retirement.
As our government is trying to polarize the public on the issue of retirement protection, then we should ask: why does the means test apply only to retirement protection but not education and healthcare?
If the administration doesn’t mind allowing kids from wealthy families to enjoy free education and rich adults to enjoy public healthcare services, then why does it have such great reservations about letting the elderly with some money in their bank accounts be entitled to non-means-tested retirement benefits as well?
How can the government justify holding a double standard on these equally important policy areas that all require a long-term public financial commitment?
As a response to calls for establishing a full-scale universal pension scheme, the former colonial administration introduced the Mandatory Provident Fund shortly before the handover as a first positive step toward that ultimate goal.
Unfortunately, much to the dismay of the public, the administration of the Special Administrative Region is backpedaling on its commitment.
Isn’t it ironic that, on one hand, the government is urging the people of Hong Kong to be more patriotic, but, on the other, it is going back on its word when it comes to looking after our senior citizens?
Holding universal retirement protection to a gross double standard and imposing a means test on pension benefits is in effect showing utmost disrespect for our elderly.
To make matters worse, in order to demonize universal retirement schemes and swing public opinion its way, the government is always citing examples of western countries that are deep in debt to prove its argument that universal pension schemes don’t work.
Meanwhile, it deliberately hides the fact that some countries, like Singapore, that provide their people with universal retirement protection are nonetheless financially sound.
I completely agree that the implementation of a universal retirement scheme will have far-reaching implications for public finances, and therefore the administration must proceed with caution and any proposal must be subject to thorough discussion in our society before being put into practice.
However, the government should at least be honest and provide us the real picture for discussion — so that members of the public can make their own judgment based on real facts — rather than resorting to scare tactics, such as threatening tax hikes, to steer public opinion in its favour.
This article appeared in the Hong Kong Economic Journal on Dec. 30.
Translation by Alan Lee
[Chinese version 中文版]
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