SCMP Thursday, August 30, 2001

Helping the poor

Although the latest survey shows a growing gap between rich and poor, it comes at a time when every sector of the community is feeling the pinch. Some rather less than others, perhaps.
The middle class is taking a big hit. Many families, having saved for years to become home owners, are now victims of negative equity. Nor are they immune from the trauma of unemployment. But as the household survey has revealed, those with skills valued in a knowledge economy are much less affected by the downturn. In fact, the number of people earning more than $30,000 a month went up by 4.52 per cent to 339,600 in the second quarter.
During the same period, however, the number of people earning less than $5,000 increased by 12.6 per cent to 422,200. The figures are testimony to the fact that the semi-skilled and unskilled workers have least hope for a change in circumstances when the economy picks up. The transition to a knowledge-based service economy is hurting them badly, and few of them will benefit from the new learning for life policy which the Government is promoting.
Nevertheless, it is easy to be misled by figures. Although the rich are earning more and the poor less, the actual gap between the wealthiest and most deprived members of our community is less alarming than a simple comparison of incomes would reveal.
About 50 per cent of Hong Kong's population live in heavily subsidised public housing. In the present recession, these residents - provided they keep their jobs - have survived reasonably well. Although there is no official poverty line in the SAR, the Comprehensive Social Security Assistance scheme provides income support to individuals and families based on their actual needs. Every SAR resident, regardless of means, is also entitled to nine years of free basic education, subsidised tuition at higher levels, and heavily subsidised medical services.
If those transfer payments are taken into consideration, the wealth gap is smaller. This is not to say that there is nothing more we could do to help the poor lift themselves. But playing about with the tax system by introducing a so-called negative tax is not the answer.
The less fortunate must be helped, but aid should be focused to equip them with skills to survive on their own, instead of fostering dependency.