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Minutes of the 3Rd Meeting of the Community Building and Social Services Committee of the Kowloon City District Council Date

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Minutes of the 3Rd Meeting of the Community Building and Social Services Committee of the Kowloon City District Council Date Minutes of the 3rd Meeting of the Community Building and Social Services Committee of the Kowloon City District Council Date : 24 March 2016 (Thursday) Time : 2:30 p.m. Venue : KCDC Conference Room Present: Chairman: Mr. NG Po-keung (left at 4:35p.m.) Vice-Chairman: Mr. YUE Chee-wing, Admond Chairman: Members: Ms. LEUNG Yuen-ting Mr. CHO Wui-hung Ir Dr CHENG Lee-ming (left at 5:00p.m.) Mr. NG Fan-kam, Tony Mr. LAM Tak-shing Mr. LAM Pok, Jimmy Mr. YEUNG Chun-yu, Ronald (left at 4:05p.m.) Mr. HE Huahan Mr. YANG Wing-kit (left at 4:47p.m.) Mr. KWAN Ho-yeung, Roger Ir. CHEUNG Yan-hong, MH Mr. LAI Kwong-wai (left at 4:13p.m.) Mr. SIU Leong-sing, Terence (left at 4:13p.m.) Mr. LUK King-kwong (left at 4:35p.m.) Mr. SIU Tin-hung Mr. PUN Kwok-wah Secretary: Mr. IP Wai-kong, Eddie Executive officer I (District Council), Kowloon City District Office Absent: Mr. LO Chiu-kit In Attendance: Ms. IP Yuk-mei, Eunice Senior Liaison Officer (District Liaison), Kowloon City District Office Ms. CHAN Wai-chun Assistant District Social Welfare Officer (Kowloon City / Yau Tsim Mong) 2 Attendance by Invitation Item 1 Mr Stephen SUI, JP, Deputy Secretary for Labour and Welfare Ms Jade LAI Political Assistant to Secretary for Labour and Welfare Item 2 Mr Anthony NG Chief Executive Officer, Financial Dispute Resolution Centre Ms SIU Fung-ching, Communications Manager, Financial Dispute Resolution Centre Ms SHEK Lok-tung Communications Officer, Financial Dispute Resolution Centre ✽ ✽ ✽ Opening Remarks The Chairman of the Community Building and Social Services Committee (CBSSC) welcomed all Members and departmental representatives to the meeting. 2. Before entering into the discussion, the Chairman requested Members to note that if the matters to be discussed involved conflict of interests with their property rights, profession or investment, they should make a declaration prior to the discussion so that the Chairman would consider if it was necessary to ask the members concerned to exit from the meeting during the discussion or voting. Furthermore, according to Section 36(2) of the Kowloon City District Council Standing Orders (Standing Orders), since there were 19 Members in the CBSSC, once the number of Members present fell below 10, he would announce a suspension of discussion. Public Engagement Exercise on Retirement Protection (CBSSC Paper No. 05/16) 3. The Chairman welcomed Mr Stephen SUI, JP, Deputy Secretary for Labour and Welfare and Ms Jade LAI, Political Assistant to Secretary for Labour and Welfare to the meeting. 4. Mr Stephen SUI, Deputy Secretary for Labour and Welfare explained to Members about the background of the public consultation on retirement, pointing out that the Chief Executive in his election platform had stated to address the elderly poverty issue, and study how to introduce short, medium and long-term measures to improve the retirement protection system. The related public consultation exercise was carried out by the Commission on Poverty. The Government respected different positions of the members of the Commission on Poverty, and different opinions had been included in the consultation paper. He then briefed Members that Hong Kong was facing a number of challenges including a declining birth rate, aging population, economic growth affected by a shortage of workforce, and structural fiscal problems, as well as the existing pillars of retirement security. 5. Mr Jimmy LAM requested that the universal retirement protection scheme should be implemented as soon as possible in return for the contributions of the elderly to Hong Kong over the many years, and said asset test should not be included in the scheme concerned. He thought that introducing an asset vetting mechanism would not only increase administrative cost, but also would lead elderly people worried about exceeding the prescribed limit to hide their assets, thereby possibly violating the law. He also enquired how the government would use the earmarked $50 billion. 6. Ir Dr CHENG Lee-ming supported the implementation of the universal retirement protection scheme without asset test, believing that given the serious wealth disparity and social inequality, universal retirement protection should not be linked with other government spending. He added that in the past years Hong Kong had recorded a fiscal surplus, so it had sufficient ability to provide the additional expenditure of more than $20 billion each year for the above-mentioned scheme. However, he also suggested that the government raise profits tax and salaries tax and introduce the sales tax based on “user pays” principle to increase revenues. 7. Mr Roger KWAN said that the Democratic Alliance for the Betterment and Progress of Hong Kong (DAB) considered that the elderly were facing various difficulties in life and in 2011 proposed a three-tier “retirement protection pension” programme. Through an assets and means test mechanism, the elderly in need could obtain a large amount of pension, while the elderly people with more economic difficulties were able to apply for comprehensive social security assistance (CSSA). On top of benefiting all the elderly people, the programme could also utilise resources in a fairer and more focused manner. The DAB supported the early implementation of the universal retirement protection scheme. 8. Mr Admond YUE supported the implementation of a universal retirement protection scheme without assets test, but considered that the government should explore the feasibility of levying the “user pays” sales tax for both rich and poor as soon as possible to ensure a steady stream of financial revenues. 9. Mr LAM Tak-shing said different public opinion polls showed that the government should implement the universal retirement protection scheme as soon as possible. He also made a number of suggestions, including promoting the silver market, extending the retirement age of civil servants, establishing experience sharing platforms for retirees, as well as training the retired for them to continue to contribute to society. 10. Mr Tony NG said the Mandatory Provident Fund (MPF) generated a low rate of return, and coupled with high administrative costs, failed to provide desired retirement protection. He advised the government to implement a universal retirement protection scheme without assets test to cope with a growing elderly population. In addition, he pointed out that the government had failed to accurately estimate its income and expenses for many years, and therefore recommended that the proposal to centrally provide a monthly subsidy of more than $3,000 should be re-examined, and the amount of subsidy should be determined depending on the financial position each year. 11. Mr YANG Wing-kit supported the implementation of the universal retirement protection scheme and suggested introducing a more lenient assets test. He added that it could be combined with the existing old age allowance (commonly known as “fruit money”) arrangements. Elderly persons aged 65 or above were eligible for subventions, but elderly people who were willing to undergo the assets test could receive a higher amount of subvention, while those aged above 70 should be exempt from the test. 12. Mr LAI Kwong-wai said that the Hong Kong Association for Democracy and People's Livelihood (ADPL) did not agree to introduce assets test for the universal retirement protection scheme, saying that the scheme was not intended for poverty relief. He moved on to say that based on the experience of implementing the old age allowance scheme, not all eligible elderly people would submit applications. And after the implementation of the universal retirement protection scheme, the CSSA expenditure would also decrease. He therefore considered that the spending estimated by the government was too high. In addition, he believed that larger enterprises had the responsibility to bear the related expenses, and suggested raising the profits tax rate to 1.9% for enterprises earning $10,000,000 or more. 13. Ir CHEUNG Yan-hong stated that the debate over the universal retirement protection scheme had led to a rift between different sectors of the society. He believed that the scheme concerned should cover the middle class, allowing them to put the money for donation or other purposes at their own wills. He supported the proposal of Mr YANG Wing-kit to grant the related allowances to people aged above 65 and those over the age of 70 under a tiered system, and to implement the plan as soon as possible. 14. Mr LUK King-kwong said he attached great importance to universal retirement protection and recognised its complexity, and recommended that the government conduct extensive consultation with different sectors of the community, including accountants and other professionals. He believed that the universal retirement protection scheme should be subject to a lenient assets test and look after the senior citizens with financial needs. In addition, he recommended that Hong Kong's four pillars including MPF should be re-examined. 15. Mr Stephen SIU, Deputy Secretary for Labour and Welfare gave a consolidated response, the main points of which were as follows: － To show the determination, the government had already earmarked $50 billion to improve the retirement protection and hoped to map out the direction for retirement protection improvement through extensive consultation, brainstorming, and consensus building, including how to make good use of the provision. － Universal and non-universal retirement protections were not at odds. At present several measures that benefited the elderly, including old age allowance, $2 transport fare concessions and medical coupons, were exempt from means test or assets test. However, as the allowances of different projects involved different elements, the Government must act within its capacity when making commitments. － Apart from cash grants, the Government must also consider how to effectively allocate resources to cater for different needs of the elderly, such as improving and strengthening medical services for the elderly.
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