Universal Retirement Protection Scheme and Old Age Allowance

President, today I have heard the voices of many colleagues, highlighting the inadequacies of the MPF. One of the inadequacies is a reduction of the MPF balance in the aftermath of the financial tsunami, which has made many people suffer losses. I hope Members would understand that there are high-risk and low-risk products under the MPF System.

When it was launched, efforts had been made to promote the system, highlighting the need to reduce stakes in high-risk funds and increase those in low-risk funds when one approaches the age of retirement. It can therefore be seen that consideration has been made in this regard, and the Government had expressed concern about the effects that could be brought about by any financial turmoil. So, if members of the public have listened to the advice of the MPF Schemes Authority (MPFA), I think they should have switched to low-risk products and
therefore emerged from this financial tsunami unscathed.

Certainly, some people may have made different choices. And yet, in my opinion, the MPFA has done what it ought to have done. Members should not forget that though the financial turmoil has resulted in a plunge of stock prices, we should not lose confidence in either the stock market or the financial system as such ups and downs is precisely the feature of our financial markets. The recent plunge is attributable to the rises in 2006 and 2007, hence we should not think that the same applies to all other investments. It is most important to assess our own risk and make our own choice of investment. I do not think that MPF is totally undesirable. Recently, someone told me that he had saved as much as $100,000 under the MPF in just a few years, so that when he retires in the future, he could tell his children about this sum of money and hence live with them in a dignified manner. Although this is not a large sum of money, it can be used to help meet household expenses. For this reason, I think that MPF does serve a purpose.

Yet, we should understand that MPF does have a lot of deficiencies, one of them being the large number of low-income earners. Given the low income, even with the employers’ contribution, the amount of money is very limited and is definitely not enough for retirement.

Another point is that while many people are very glad to have saved this sum of money which is not for immediate use, they would wait patiently until it can be used and may probably spend it all very soon. Therefore, MPF does not seem very helpful to this kind of people.

I think that universal retirement protection should brook no further delay and it is something that the Government must consider. The provision of subsidies in such a piecemeal manner absolutely cannot help solve the problems in Hong Kong. It is necessary to establish a universal retirement protection system so that everyone can rest assured of a secure life in their twilight years. How can this be achieved? I do not think the Government has to feel worried too much. Neither is there a need to evade it as this Council has already reached a consensus regarding the ageing population. I have heard that many times, and I understand that a consensus has been reached. I think that the Government needs to do this. Why? The major reason is that retirement needs a lot of money. We all know that retirement will require a large sum of money. While many overseas countries have already put in place a retirement system, they have to extend the age of retirement all the same.

Why? Because there are more and more people who wish to get this sum of money when the number of people who work becomes fewer and fewer. If we genuinely face up to this problem, look at it carefully, we will notice that it is just a deception of oneself and others to think that we have an enormous reserve. In this circumstance, we should spend only when it is necessary and save when it is not. I guess this kind of thinking probably has a greater social meaning to Hong Kong as a whole, as it is much better than giving out money when there is a considerable surplus and rejecting all requests when there is a deficit. In fact, all individuals should make savings when they are still young and have the earning ability, and it is the same for this system. Likewise, there is also a need for a society to save when it has a surplus and a large working population. However, we should not deceive ourselves and others. Rather, all calculations must be accurate. I think Members should understand the purpose of raising this issue for discussion, and they are, I believe, very reasonable. They should know that if the calculation is accurate, it can be used as an argument. I do not see why Members would oppose such a proposal. The Government can genuinely tackle this problem. There is no use evading as it is something that Hong Kong must face up to.

After a decade or two, a serious problem will certainly emerge. By that time, these people will still turn to the Government for a living. The situation would be even worse if the Government does not have any money then. Therefore, I consider that the Hong Kong Government should genuinely…… I was aware of this problem before I was elected to the Legislative Council. I strongly oppose the Government failing to implement any long-term universal protection initiative in the face of an ageing population. It is hoped that the Government will make up its mind and expeditiously consider such a universal protection system. Regarding the motion and amendments proposed by the several Members today, I consider them very meaningful and will therefore render my support to them. Thank you.

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