Motion Debate on Alleviating the disparity between the rich and the poor

Madam Deputy, Mr Frederick FUNG's motion is entitled "Alleviating the disparity between the rich and the poor". This motion topic is open to two interpretations. One is the provision of assistance to the poor to alleviate the disparity between the rich and the poor. The other is bringing down the rich as a means of narrowing the wealth gap. However, Mr Frederick FUNG has never mentioned in his speech the idea of bringing down the more capable and richer ones, for his whole idea is just to assist the poor in lifting themselves. I very much agree with him on this point.

Madam Deputy, I suppose the deterioration of the poverty problem in recent years has been caused by three factors. The first factor is the recession that started several years ago, around 1997 and 1998. This has led to the incessant rise of our unemployment rate and precluded any wage increases. Society has been caught in deflation, plunging many industries into extreme sluggishness.

The second factor is something that started much earlier than the recession in the past few years. Over the past one or two decades (that is, since the 1980s and the 1990s), our economy has been undergoing a transformation process, one which is marked most obviously by the relocation of our industries northwards to the Mainland. Why were there so many factories in Hong Kong in the 1970s? Understandably, the first answers must be our low land prices and cheap labour at that time. Another reason was that industrially, Southeast Asian countries and the Mainland were still lagging behind us at that time. All this accounted for our industrial boom in those years, and as a result, workers with low qualifications and not many skills could still find jobs in a variety of manufacturing industries such as the garment industry and the plastics industry. However, faced with our soaring land prices in recent years, manufacturers no longer find it advisable to establish any production lines here, or they may simply consider it much better to do so in the Pearl River Delta Region. In the late 1980s, the business sector once supported the importation of labour, hoping that the availability of imported workers with lower wages, together with the employment of local workers, could enable Hong Kong manufacturers to survive longer. Unfortunately, all representatives of the labour sector opposed the importation of labour very rigorously. Having been denied the importation of labour, manufacturers started to think that since land prices, electricity charges, and so on were so high in Hong Kong and the Government had even implemented the "user pays" policy, it might be a good idea for them to withdraw from Hong Kong.

There is another strong reason for their withdrawal. But when it comes to this reason, I simply do not know whether we should thank or blame the labour-sector Members of this Council. They have succeeded in fighting for so many benefits for workers, but, as I often comment, their noble intention has achieved an undesirable result. Over the years, many employers have come to realize after cost computations that given our labour legislation, they will sooner or later fail to survive, and that it is better to move northwards to the Mainland. But honestly speaking, even this is no longer so viable these days. Many manufacturers operating in Shenzhen now find that the monthly wage they have to pay has already exceeded RMB 1,000 yuan. In other words, labour costs there have also gone up. As a result, many manufacturers have started to move farther north from Shenzhen, that is, to move yet farther into northern Guangdong. Many manufacturers have even moved to Vietnam or other Southeast Asian countries. Economic restructuring has led to the disparity between the rich and the poor in Hong Kong. It can be said that it has made it very difficult for grass-roots employees to get a job. This is also a major reason. I think this is a structural reason, one which has led to such problems as unemployment and manpower mismatches. In many cases, these problems simply cannot be resolved.

Another reason is the policy of family reunion implemented since the reunification. I must first make it clear that we all support this policy very strongly. But we must also note that many of the 150 people who come to Hong Kong on One-way Exit Permits every day are low-income earners with little education. They will inevitably compete with local workers for jobs. In other countries such as the United States, Canada and the United Kingdom, the situation is very different. Dr Fernando CHEUNG commented earlier on that the wealth gap problem in foreign countries was not as serious as that in Hong Kong. He is certainly right, but we must at the same time understand the immigration policy of, say, the United States. Under its immigration policy, extra points are awarded to those who know English, who are university graduates, or who can meet the specified investment requirements. In other words, the whole immigration policy is designed to bring in immigrants of greater capabilities or means. The immigration policy of Hong Kong is totally different. Under this policy, as many as 55 000 poor people are allowed to come to live in Hong Kong every year, meaning that over the past seven or eight years, roughly 400 000 poor people have arrived, so whether or not the local people are themselves rich, the wealth gap problem will definitely deteriorate due to the arrival of large numbers of poor people.

Madam Deputy, on the question of helping these people, I only wish to say that in the opinion of the Liberal Party, we should offer assistance only to those in the greatest need, instead of helping them all. But who should be regarded as having the greatest need? And, how can we tell that one is in no need for assistance? All this of course is a question of relativity. Are we going to draw a poverty line for 1 million people and then offer assistance to all those 800 000 people below the line? Or, should we say that only 200 000 or 300 000 of these 1 million people need special assistance because they are particularly poor? I think all this really warrants discussions in society.

Currently, under the Government's policy, if a CSSA recipient has a job, he can enjoy a disregarded earnings ceiling of $2,500 monthly. Honestly speaking, I also find this ceiling much too low. When one can otherwise receive $8,000 to $9,000 in CSSA payment, people will inevitably say that it is better not to work if just $2,500 can be disregarded. Can the people be given a greater rate of disregarded earning? It may really be necessary for the Government to review the wage ceiling of $2,500. But precisely what level should be set down, I cannot tell.

The motion proposes that the Government establish an interdepartmental committee on aiding the poor. Similar motions were also moved by Mr Frederick FUNG himself and Mr WONG Sing-chi in 2001. At that time, the Liberal Party opposed the proposal because the Government had already set up the Task Force on Employment, and we believed that the best way to aid the poor should be to help them find a job and earn their own living. We therefore thought that if the Task Force on Employment could do a good job, many people would be able to extricate themselves from poverty. We were then of the view that the emphasis should be on training and the creation of employment opportunities. But as we can now note from the latest statistics of the Government, the number of CSSA recipients has increased from 370 000 in 1999 to 530 000 last year. And, although the Task Force on Employment has been doing quite a good job over these three years, we just do not know whether it can really help any sizeable number of people to secure employment after retraining. We are afraid that this may not be the case. Therefore, we have decided to change our mind; we now agree that the Government should set up an interdepartmental committee on aiding the poor — this is really a very appropriate name coined by Mr Frederick FUNG. We maintain that the Government should set up such an interdepartmental committee.

I also see eye to eye with the two Members who pointed out earlier on that children, especially children of poor families, should receive our special attention. If they are really as miserable as described by Dr Fernando CHEUNG, not even having any money to buy basic sports equipment, I am sure that they will definitely face social integration problems in the future. We should therefore pay special attention to children.

Some also say that the elderly and the disabled are another group of people that should receive more attention from us. We are also aware of this. In fact, although many old people in Hong Kong have worked very hard for several decades and managed to bring up their children, they may, for various reasons, have no savings, and their children may be unable to support them. For this reason, the Government should pay more attention to them.

I would think that of all the problems, the most difficult one to tackle should be unemployment, because in the case of many employees, it is very difficult for retraining to yield any effect. That being the case, should the committee on aiding the poor explore how best to build a second safety net, so that long-term assistance can be offered to those who need a helping hand from society due to their loss of employability? We think that this idea should be supported.

The Liberal Party, however, does not agree to the formulation of a poverty line because as pointed out, for example, in one study of the United Nations Organization entitled Choices for the Poor, it is very difficult to draw a universal poverty line due to price variations in different countries and places. The United Nations Organization has also put forward the idea of a consumption basket, but this is also hardly workable. Price variations in different countries are again the reason. Property prices pose the greatest problem; many countries want to draw a poverty line, but just because of the problem posed by property prices, they are unable to do so. As for the standard suggested by the World Bank, I do not think that it can be accepted by anyone in Hong Kong. The poverty line it suggests is set at a daily income of US$1 or US$2, or HK$7 to HK$15. Such a daily wage level is simply inconceivable to Hong Kong people. Therefore, I think that the drawing of a poverty line should be left to the interdepartmental committee on aiding the poor. Most importantly, the Government must first lay the groundwork, and members of the public, academics and experts should be consulted only at a later stage. There is no need to follow the advice of Dr Fernando CHEUNG and invite the participation of all these people right at the very beginning. If we do so, it may become less likely for us to complete the work as quickly as we desire.

Madam Deputy, in tackling the poverty problem, the last important point to note is that the Government must review its population policy indeed. As long as the present population policy remains unchanged, it will be very difficult to solve the wealth gap problem.

Thank you, Madam Deputy.