Speech on Establishing a low-income subsidy system

Today’s Motion is on subsidy for the low-income. Committee on Poverty is studying details. It is reported that latest thinking is to help low income families with children. There would be income assessment and the “poverty line” might be used as threshold. There would be no criteria on residence and new arrivals that are eligible would also benefit. As the scheme intends to encourage employment, applicant families would be required to meet minimum monthly paid working hours of 140 in total. Subsidy would be offered to children only at per capita rate of less than HK$1,000.

In my view, it is the right way forward and deserves support. The proposal focuses on helping poor working families and encourages employment. However, it targets at children with a view to preventing cross generation poverty through social mobility. Survey results show that there are about 157,000 such families and 540,000 people in total. Among them, 140,000 children might be defined as poor. The community cares about their future and assistance is imminent.

Actually, I have repeatedly asked for direct subsidy or even negative income tax to assist low income families and encourage them becoming self-reliant. Overseas studies have shown that if welfare recipients are better off than low income families they would be reluctant to seek employment. Worst still, low income families might also lose their drive to work. Therefore, offering subsidy to low income families is particularly meaningful to a social security system.

Subsidizing low income earners comes from the concept of “working welfare”. It offers welfare to those who are employed as a means to supporting them to stay self-reliant and discouraging them to seek public assistance. It would also appeal to those receiving public assistance to rejoin the labour force. There are views that unconditional welfare should be replaced by “working welfare”.

Lately, more welfare policies are formulated under such concept. Apart from low-income subsidy under consideration, there are already employment-based traffic subsidy and one-ff living allowance from Community Care Fund to “N-nil” families in operation. In my view, the Government should really consider reorganizing individual schemes into a single system of “working welfare” for more extensive support to those families. Thus, low income families might make better use of the subsidy to meet their own needs.

It has always been my view that low-income subsidy is more than financial assistance. There are far-reaching goals. A subsidy system would not only help poor children, giving them better chance to get out of poverty, but also bring along a positive message that God help those who help themselves. Their parents earn their living and the community offers to help. It would help convey positive values of life and help defuse grievances for more positive thinking in society.

Similarly, there is room for improvement in Comprehensive Social Security Assistance. (CSSA). We all realize that society needs a safety net but the system may be improved to encourage those who are still capable to work becoming self-reliant. For instance, Support for Self-Reliance Scheme under CSSA aims at encouraging them to rejoin the labour force. We may consider lifting the income exemption limit under the Plan. We may also consider reducing the claw back but depositing the difference into a designated account. The accumulated sum may only be withdrawn when the recipient has genuine needs. I believe that similar improvements would equally convey positive messages.

Finally, may I point out that we should not only offer assistance to low income families but also offer opportunities in the job market. Our goal of helping people in self-reliance would be unreachable if they could not find a job no matter how hard they have tried. Moreover, whether poor children might get out of poverty would depend on job opportunities in the labour market. Therefore, economic development and productivity improvement are essential. If the economy went bust and all became thrifty, like the final phase of financial crisis, how could the community be capable of helping the poor?

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