Relieving Financial Burden of the Middle Class

Hon KP Chan on Motion on Relieving Financial Burden of the Middle Class (Synopsis):

•    The middle class is not clearly defined.  Some define it in terms of income.  Others may choose occupation, education or even values instead.  In the absence of consensus among the Government, political parties and the public, policy initiatives targeting at the middle class are often criticized by politicians as unhelpful and falling short of public aspirations.

•    The desire of the middle class is often unattended to.  Modest families are equally stressed as the grass root.  Apart from routine expenditures like accommodation and education, they pay direct tax as well.  They contribute more to public finance than what they would receive in return.  Policy bureaux should find out characteristics of the middle class in a systematic way and propose targeted policies in response.  If these policies are backed by established procedures and good grounds, the community may evaluate their outcomes objectively.

•    In the report of the last By-census of 2006, there is an analysis of household income after tax and welfare receipts.  The analysis divides household into 10 groups according to reported monthly incomes.  The first group is the bottom 10 percent and the last group is the top 10 percent.  Findings are interesting and deserve attention.

•    For the first group, i.e. the lowest income group, the ratio of adjusted household income after tax and welfare receipts to original household income is 226 percent.  It means that their welfare receipts equal to 126 percent of income.  For the eighth and ninth groups, their ratios are both 100 percent only.  The Government should make good use of the results of the 2011 Census (to be released) and propose policies to support the “sandwiched class”.

•    I support the original Motion and Amendments except the proposal by the Hon Audrey Eu to withdraw the earmarked $50 billion for the Health Protection Scheme (HPS) and transfer to public health care purposes.  Many of the middle class are looking forward to early implementation of the HPS and benefits of regulated private hospital services and transparent tariff in private health services.  Sustainability of the proposed Scheme is a cause for concern because the earmarked sum would last only for 25 years.  Many are urging the Government to show long term undertaking with further fund injections.  The proposed withdrawal of the earmarked sum would jeopardize the HPS and I cannot agree.  I vote for putting more resources in public health care but not at the expense of the HPS that would enhance protection for 2.5 million people currently covered by medical insurance.  As public finance is strong, we should ask the Government to allocate additional resources instead.

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