15 JAN 2014
Oxfam Welcomes the Announcement of the Low-income Working Family Allowance in the Policy Address and Urges the Government to Review the Minimum Wage Every Year
In his policy address today, Chief Executive Leung Chun-ying announced the government would introduce the Low-income Working Family Allowance. Oxfam welcomes this step, in particular the decision to offer an additional $800 subsidy each to children from working poor families as a measure to improve their lives. In this sense, the government’s plan corresponds with recommendations made by Oxfam. The agency believes that this will alleviate the pressures that these families face in caring for their children and allow them to avoid having to rely on Comprehensive Social Security Assistance (CSSA). In the long term, it could help alleviate intergenerational poverty.
The allowance as laid out in the policy address targets not only families below the poverty line, which is set at 50 per cent of the median household income. Families that make slightly more will be eligible to receive an allowance at half the value. Oxfam agrees that this arrangement will allow working poor families to escape from poverty and at the same time prevent households living close to the poverty line from falling below it. As such, it will have the dual effect of alleviating and preventing poverty.
Oxfam Director General Stephen Fisher said: “We welcome the government’s decision to adopt recommendations from Oxfam and other organisations by announcing the Low-income Working Family Allowance in the policy address. We hope that the government will implement concrete measures as soon as possible so that working poor families with children can maintain a basic standard of living without having to resort to CSSA. We agree with the direction that the government is taking in earnestly supporting the working poor and incentivising them by creating an arrangement where those who work more receive more allowance.
“However, we believe that instituting an annual review of the minimum wage is a better solution in the long term. Many of the working poor try very hard to make ends meet. They strive to be self-sufficient and to stand on their own two feet. What they want is to be able to earn their own living, not to rely on CSSA.”
The Low-income Working Family Allowance
The allowance as described in the policy address, its target beneficiaries and its main purpose correspond closely to Oxfam’s recommendations. Both the government’s plan and Oxfam’s proposed scheme target working families with children that do not receive CSSA. Both aim to relieve the financial burdens that such families face in caring for their children and encourage adult household members to remain employed, so that they can avoid relying on CSSA.
The government has proposed adopting asset limits broadly similar to those for public housing as part of the income and assets assessment for the allowance, and that there be no minimum residence requirement. Oxfam finds this basically acceptable. However, the agency believes the government should make the application procedure as simple and clear as possible so that families that have a real need can benefit from the allowance. The government has proposed providing a basic allowance to working members of low-income households, at $600 or $1,000 depending on where they fall in a two-tier working hour system. Oxfam agrees that this can incentivise low-wage earners to work and to increase their incomes. However, this is highly revealing of the fact that the current minimum wage is not sufficient to ensure that low-wage earners can make enough to provide for themselves and one other household member.
Oxfam is concerned that this allowance – which is actually a wage subsidy in disguise – will make it easier for employers to avoid increasing wages. It is also worried that because of these measures, the government will not increase the minimum wage. As a result, Oxfam urges the government to pledge to review the minimum wage every year. This would help those who are employed and encourage them to be self-sufficient.
Additional Support Services for Ethnic Minorities
Oxfam welcomes the government’s change of heart and its announcement that it will implement the Chinese Language Curriculum Second Language Learning Framework. The agency agrees that support should be provided as early on in the development of minority children as possible to help them pass the Chinese subject in the Hong Kong Diploma of Secondary Education Examination. The policy address included mentions of multiple proposals, including increasing support services for ethnic minorities, introducing the learning framework in primary and secondary schools, and enhancing school-based support services for kindergartens with minority children. Oxfam believes that these measures will help minority students learn Chinese and other subjects. The government’s decision to provide Applied Learning in Chinese as a subject at the upper secondary level will mean that minorities who are not as strong in the language will have the opportunity to acquire an additional recognised qualification in it. However, Oxfam believes that the government should strengthen Chinese-language learning in the kindergarten and primary school stages. Oxfam believes that providing a good foundation is the most effective way for ethnic minority schoolchildren to enjoy the same opportunities in higher education and later on the job market.
Oxfam is dedicated to fighting poverty and inequity worldwide. The international and independent development and humanitarian organisation tackles poverty in four main ways: sustainable development in poor communities, disaster relief, local, national and global advocacy, and education with Hong Kong youth. Established in Hong Kong in 1976, Oxfam Hong Kong is a founding member of Oxfam, an international confederation that has assisted poor people in 93 countries. Oxfam Hong Kong alone has supported poor people in over 70 countries/regions.
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