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Following is a question by the Hon Frederick Fung and a written reply by the Financial Secretary, Mr Henry Tang, at the Legislative Council meeting today (January 17):
Question:
In its Report on Working Poverty published in February last year, the Subcommittee to Study the Subject of Combating Poverty of the Legislative Council recommended the provision of financial assistance to the working-poor households, such as tax credits or rental and travelling subsidies. In response to these recommendations, the Commission on Poverty discussed at its meeting in March last year the provision of long-term travel support to the low-income earners who live in remote areas and need to commute to work across districts. Before the Appropriation Bill 2006 was put to vote in March last year, the Financial Secretary had promised a number of Members of this Council that a trial scheme would be launched in 2006-2007 for the implementation of this idea. Nevertheless, as indicated in a discussion paper provided to the Commission on Poverty by the Administration in this month, the target of the trial scheme has become unemployed persons, rather than low-income persons as originally proposed. In this connection, will the Government inform this Council:
(a) of the current statistics of unemployed and low-income persons in Hong Kong, including their numbers, and a breakdown of them by age group, sex, household size, family income group, for how long they have been unemployed or have become low-income earners, and the districts in which they live, the percentage of those receiving the Comprehensive Social Security Assistance ("CSSA") payments in the total number of these persons, as well as a breakdown of low-income persons by occupation and income level;
(b) of the reasons for changing the target of the trial scheme from low-income persons to unemployed persons, and whether it has assessed how the failure to provide travel support to low-income persons may affect the effectiveness of the efforts in alleviating poverty;
(c) whether it will launch a separate long-term transport support scheme for low-income persons; if so, of the implementation date, the latest progress of work in this regard, the relevant work plan and timetable; and
(d) of the new measures in place to provide financial assistance to low-income households which are not receiving CSSA payments, so as to give them more incentives to work and encourage them to stay in work?
Reply:
Madam President,
Reply to (a)
The required statistics are attached in Annex.
Reply to (b)
At its meeting on March 27, 2006, the Commission on Poverty (CoP) discussed the issues relating to the provision of transport support for those living in remote areas. CoP members were supportive of the general direction to enhance work incentives to encourage low-income employees to stay in employment. For those living in remote areas, the CoP supported in principle the initiative to explore if additional transport support would be an effective way to encourage work. Members also noted that the subject involved complex policy issues like parity for residents living in other districts, other support measures for the working poor, the impact on wages and probable displacement of labour arising from the travel subsidy.
After internal deliberations, the Administration considers that providing transport allowance to encourage the unemployed to search for jobs, and assisting them during the period when they are adjusting to a new job would be an effective way to encourage those living in the remote districts to work cross-districts.
Some CoP members were of the view that the subsidies should also be provided to people living in the remote areas who were already in employment. However, some other members considered that the transport subsidies should be provided only as an incentive to people living in remote areas where there were few local employment opportunities to encourage them to find and keep jobs in other districts. Members were also prepared to provide transport subsidies to those who were already in employment but were seeking to change to jobs in other districts.
As the proposed transport subsidies are meant to be time-limited, it is unclear how effective a form of assistance it would be for people who are already in low-earning employment but are unable or have no intention to change to other jobs due to various reasons. Some members also raised a concern about the possible adverse impact of the transport subsidies, if they were to be provided on a long-term basis on wages.
The issues involved are complex and cut across different policy areas. There is a need to further deliberate carefully on their policy implications.
Reply to (c)
The CoP will further discuss the issues relating to the provision of transport subsidies to low-income earners at its next meeting.
Reply to (d)
The Administration understands that low-income earners face economic hardship in daily lives. Our long established public housing policy, highly subsidised education, medical services and other social services all strive to provide in-kind assistance to those in need, including low-income earners and their dependants who are not on Comprehensive Social Security Assistance (CSSA). Low-income employees who are not earning enough to support themselves and their families can receive financial assistance under the low earnings category of the CSSA Scheme.
In an increasingly globalised and high value-added economy like Hong Kong, the relative demand for low-education and low-skill workers decreases, affecting their income level. Some of them have unstable jobs. For them, our emphasis is to encourage them to upgrade themselves through training, and to promote economic development and job opportunities so that they can achieve self-reliance.
Against this policy background, the CoP has discussed a number of more proactive measures to assist the low-income earners, including strengthening training and employment assistance to the unemployed, providing life-long skill upgrading opportunities for the low-skill workers, reinforcing district-based community support, promoting social enterprise development, and further improvements to the CSSA Scheme to promote "From Welfare to Self-reliance".
The Administration would continue to consider suitable measures and incentives to encourage work.
Ends/Wednesday, January 17, 2007
Issued at HKT 14:52
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