Voice in Legco
Voice in Legco - People's Livelihood and Economy Should Go Hand-in-hand

Credit should be given to the Policy Address for its proactivity in alleviating poverty, helping the elderly and disadvantaged and improving education. Yet it put less focus on long-term economic development and support for the middle class and SMEs, failing to pursue people’s livelihood and the economy in tandem. While launching measures to alleviate poverty and raise land and housing supply, the Government should also pay heed to short and medium-term economic development.


The Chief Executive has announced the second Policy Address of his term, proposing significant resource commitment to three major areas, namely alleviating poverty, helping the elderly and disadvantaged, as well as education. Poverty alleviation measures emphasized on self-reliance through employment. The Low Income Working Family Allowance, which would benefit 200,000 low-income families, was introduced to help the grassroots to meet their basic needs while encouraging people to make a better living through their own efforts. Remarkable improvement was made in measures on education, housing and environmental protection, with refreshing changes seen in education measures in particular. This fully demonstrated the deliberation, determination and dedication of the Chief Executive and his ruling team in policy-making, which deserves credit and support.

Pursuing People’s Livelihood and Economy in Tandem

Hong Kong’s long-term economic development, however, should be of overriding importance and go in tandem with improvement in people’s livelihood. But this year’s Policy Address showed deficiency of targeted policy focus on long-term economic development and made minimal measures for the middle class and SMEs.

The middle class is the cornerstone of our society. As the Government has said, it calls for economic development to support the middle class and SMEs. More weight should have been attached to the economic front. Unfortunately, the Economy section of the Policy Address is just old wine in new bottles with few points noteworthy. While the Government has positively answered people’s needs and alleviated their hardship by increasing welfare for the grassroots, it has yet driven the economic development forward in parallel with improvement in people’s livelihood.

Proper Use of Resources

With colossal reserves, the Government can definitely afford to spend more, and it is time to do so. At the moment, Hong Kong is affluent but runs out time. Money should have been spent wisely in two major areas: poverty alleviation and economic development. In the last Fiscal Budget, it was frustrating to see money given out blindly. In this Policy Address, it is delighting to see the Government making long-term commitment to poverty alleviation, yet it is disappointing for its conservatism in economic development.

Poverty alleviation, though necessary, involves public expenditures that gives no returns, whereas investment in economic development is expected to bear fruits in terms of tax revenue, which can be served to meet various kinds of public spending in future. If various aspects of economic development remain stagnant but welfare spending keeps ballooning which is incorporated into the recurrent public expenditure and the revised 6:4 ratio of public/private housing construction is likely to weaken public revenue from land sales, the only way-out for Hong Kong would be raising taxes, broadening the tax base and widening the tax net. In such a case, economic growth would suffer a heavy blow, and Hong Kong would be embarking on the path of a welfare society, which is a path of no return. I believe that is not what we want to see.

Heavy Burden on Middle Class

In this year’s Policy Address, the Government has funneled resources into the grassroots, but paid not enough heed to ease the hardship suffered by the middle class. In the Policy Addresses of the past two years, there were deficient measures benefiting the middle class. There are more than 3.5 million people in middle class families, representing about 50% of Hong Kong’s population. They are not only the backbone of Hong Kong’s development but the main source of tax revenue. Burdened by inflation, high living costs and decreasing social mobility, the middle class are plighted in the standard and cost of living. Escalating burden, coupled with deteriorating quality of life, has resulted in the melt-down of the middle class.

The prime concerns of the middle class are relating to the overall quality of life including education and health care. Unfortunately, they are still under study and take time for implementation. So little and scarcely can the middle class be benefited. But their grievances and discontent have been prolonged and caught little attention from the Government. It is high time for the HKSAR Government to lend the ears to the middle class and take actions to alleviate their heavy burdens by letting them a fair share of the fruits of social development.

Social Consensus a Prerequisite

There have been heated debates and arguments over reallocation of social resources that may pose impediments to future administration, making it difficult for Hong Kong to strike an overall balance in its development. From the experience of the past year, moreover, the Government should have learnt to enhance communication with various stakeholders and forge consensus in the society in order to ensure the effective implementation of the policy initiatives proposed in the Policy Address. The real big challenge the HKSAR Government faces is how to put the many proposals into practice. As unveiled in the policy blueprint, to increase welfare commitments and recurrent expenditures, the Government must also give prudent and comprehensive considerations to the long-term financial commitments.

In summary, this Policy Address has hailed a number of proposals bearing good merits which makes it a good policy blueprint that deserves public support. But it also bears a flaw for failing to attach equal importance to medium and short-term economic development but solely stressing on the importance of alleviating poverty and increasing land and housing supply.

Should you have any comments on the article, please feel free to contact Mr Martin Liao.
Address : Rm 703, Legislative Council Complex, 1 Legislative Council Road, Central, Hong Kong Tel : 2576-7121
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