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Following is a question by the Ir Dr Hon Ho Chung-tai and a written reply by the Financial Secretary, Mr Henry Tang, in the Legislative Council today (February 8):
Question:
Will the Government inform this Council whether:
(a) it has assessed the position of disparity in household income and the relevant trend of the Gini Coefficients for Hong Kong in the next five years; if so, of the assessment results; if not, the reasons for that; and
(b) it will take measures to prevent the problem of disparity in household income from worsening?
Reply:
Madam President,
(a) The Gini Coefficient, as a measurement of the disparity in household income, is compiled based on the data obtained from the population census/by-census conducted at five-year intervals. Past data show that the Gini Coefficient of Hong Kong were 0.476, 0.518 and 0.525 for the years 1991, 1996 and 2001 respectively. The next population by-census will be conducted in the latter half of 2006 and the results will be made available in 2007. The Gini Coefficient can then be updated. Thus owing to the data constraint, together with the fact that household income distribution is affected by a host of socio-economic factors such as household size, demographic structure, employment opportunities, wage rates, labour market structure, work incentive, the rate of technological progress, etc, it is difficult to assess what the Gini Coefficient would be like in 2006, not to mention its future trend in the next five years.
Moreover, it should be noted that the Gini Coefficient as a summary indicator of income distribution has not taken into account the income redistribution effect brought about by taxation, welfare assistance and Government subsidies in various services. For instance, after discounting the impact of salaries tax, public housing benefits and education benefits, the Gini Coefficient for 2001 would be reduced from 0.525 to around 0.450. Therefore, the figures on Gini Coefficient have to be interpreted with caution especially in comparison with that of the other economies where the data collected and survey methodology may be different.
(b) The Chief Executive has highlighted "fostering harmony in the community" as a cornerstone of his "people-based" government policy in his Policy Address last October. The maintenance of a fair and just society is pivotal for the balanced and sustainable development of Hong Kong. The Government has been rallying the efforts of all sectors to create favourable conditions for personal development, thereby creating more opportunities for upward social mobility. At the same time, the Government has also been assisting the disadvantaged and low-income groups to meet their basic daily-living needs. For instance, the Government has been providing free and universal basic education as well as heavily subsidized higher education, so that the low-income group can climb up the social ladder through participation in economic activities. For the lower-skilled workers who are affected by the rapid economic restructuring, various training and retraining programmes have been put in place to help equip them with the necessary skills. In addition, heavily subsidized public housing, medical care and other social services are provided by the Government to enhance the general well-being of the people. For people in financial difficulties, they are assisted by the Comprehensive Social Security Assistance (CSSA) Scheme. Allowances under our salaries tax system are very generous by world standards, and low-income employees basically all fall outside the salaries tax net. These have contributed to narrowing the disparity in household income. In 2005, the Commission on Poverty has also been set up to take stock of the various existing policies and to look into areas where the Government's efforts could be improved.
Ends/Wednesday, February 8, 2006
Issued at HKT 12:17
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