20 NOV 2017
Oxfam Hong Kong’s response to the ‘Hong Kong Poverty Situation Report 2016’ The eradication of inequality begins with a human economy
Oxfam Hong Kong (OHK) believes the Commission on Poverty’s ‘Hong Kong Poverty Situation Report 2016’ released on 17 Nov, fully reflects how economic growth and the redistribution mechanism have failed to alleviate poverty. As such, the organisation urges the government to rethink and improve its poverty alleviation policies through a holistic approach, consider adopting the UN's Sustainable Development Goals (SDGs) and target to eradicate poverty by 2030.
Trini Leung, Director General of OHK, said: ‘The report shows that despite overall economic growth in the city, poverty in Hong Kong has continued to worsen as the population living in poverty has continued to rise over the past two years, and now stands at close to 1 million. This indicates that the poorer population are unable to share the benefits of economic growth. The government should analyse the causes of poverty and ways to prevent it from a structural point of view, and come up with a long-term poverty reduction plan and strategy that takes the SDGs into account to eradicate poverty by 2030.’
Leung added that one point worth noting in the report is that the percentage share of the government’s recurrent welfare expenditure only rose from 17.8 per cent in 2009/10 to 18.5 per cent in 2016/17. She believes that scrimping on public expenditure is why spending on education, healthcare and welfare have not increased significantly, and why poverty alleviation efforts are not as effective as they could be. If this continues, the government’s service level will regress and fail to meet the needs of the community, and ultimately exacerbate the disparity between rich and poor as well as conflicts within society.
Leung said that the government must increase public spending in these areas and build a human economy, so that 99 per cent of the city’s population can enjoy a future that works for and benefits all. Although the gap between the rich and the poor has continued to widen, over HK$650 billion has been accumulated over the past decade in government budget surplus, while fiscal reserves stand at over HK$1 trillion. Further, using the current level of expenditure, the Working Group on Long-Term Fiscal Planning – set up by the government in 2013 – estimates that the government’s revenue will still exceed the expenditure involved in providing government services in 15 years, even if the population increases. This indicates that the government is sufficiently capable of increasing public spending and alleviating poverty.
Leung believes that the government’s recurrent expenditure as percentage of the city’s GDP has remained low – much lower than OECD member countries, such as Korea, Japan, the United Kingdom, Australia, Canada, New Zealand, etc. and is to blame for the current structural surplus.
On top of this, the city’s aging population will put pressure on its public finances in the long run; in fact, the report mentioned the projected share of the elderly population in 2026 will increase to 24.6 per cent, and will further increase to 31.1 per cent in 2036. In view of this, Oxfam urges the government to prepare by reviewing the current tax system and using the ‘affordable users pay’ principle. It should also explore the feasibility of various methods to increase government revenue, including adjusting highest-earning companies’ corporate profits tax rate to realise the principle of tax justice and strengthen the function of redistribution. Doing this would narrow the gap between rich and poor, reduce inequality and create a fairer society.
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Oxfam is a worldwide development organisation that mobilises the power of people against poverty.
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