Oxfam welcomes two policy changes in the 2017 Policy Address today, namely the abolition of the ‘bad son statement’ and the phasing out of the MPF offsetting mechanism. Although the city’s wealth has continued to grow, the gap between rich and poor continues to widen. In 2015, the richest 10 per cent’s median household income was 29 times that of poorest 10 per cent. It is imperative to change policies so that the poorest can escape poverty. Oxfam believes that there is still much room for improvement in policies proposed in this Policy Address. The agency hopes that the government will respond positively to its recommendations below:

1. The government should take the lead in scrapping the MPF offsetting mechanism

Oxfam welcomes the government's commitment to gradually scrap the Mandatory Provident Fund (MPF) offsetting mechanism. However, the SP and LSP are compensation for dismissal of employees and should not be confused with retirement protection. Oxfam has strong reservations to the government’s proposal to reduce the SP and LSP, which are the rights and interests of workers when they are dismissed.

Aside from this, we urge the government – as the biggest employer in Hong Kong – to take the lead in scrapping the MPF offsetting mechanism to protect its contract and outsourced employees. For instance, it could amend existing contracts and tender notices to prohibit outsourced contractors from offsetting employees’ SP and LSP.

2. Review minimum wage annually to address working poverty

Since the implementation of the Statutory Minimum Wage (SMW) in 2011, a third adjustment will be made in May this year under the biennial review system. However, the adjustment still lags behind the inflation rate in the same period; in fact, the real incomes of workers in certain industries have even fallen.

Oxfam urges the governmentto change the biennial review to annual so that the increases are on par with inflation and that the SMW level is above the Comprehensive Social Security Assistance (CSSA) payment level. That way, the poor can have stronger motivation to work their way out of poverty. 

3. Allow independent applications from elderly who live with their children

Oxfam welcomes the government’s move to abolish the arrangement for relatives to declare that they will no longer provide their parent(s) with financial support (i.e. the so-called ‘bad son statement’). However, it urges the government to allow the elderly who live with their children to apply for CSSA. This will enable the elderly who live in poverty to receive financial support from the government, allow their families to take care of them and help them age in place.

4. Provide ethnic minority kindergarten children with Chinese language learning support to reduce the poverty many of them face

It is easiest for children between the ages of 0 to 8 to learn; if the government’s policies make best use of this window of opportunity and provide ethnic minority children with early and continuous Chinese language learning support, this would greatly improve the opportunities they have for future studies and employment.

Although the government has provided additional resources to kindergartens that admit ethnic minority students under its Free Quality Kindergarten Education Scheme, it does not include kindergartens that have fewer than eight students. Oxfam therefore believes that the government should provide additional resources on a pro-rata basis to eligible kindergartens with fewer than eight students, whilst also requiring them to use the resources solely to hire Chinese teachers.

Currently, there are no curriculum guidelines for ethnic minority children who learn Chinese in kindergarten. Oxfam once again urges the government to provide a curriculum guide for teachers who teach Chinese to non-Chinese speaking kindergarten students.

5. Advocating for Tax Justice

While the Policy Address was being announced, world leaders were also at the World Economic Forum in Davos, Switzerland. One of the discussions is multinational corporations’ use of different international tax rules to shift profits to places with low or no tax rates. Oxfam is disappointed that the government did not mention the issue of tax avoidance by multinational corporations in this year's policy address.

Oxfam urges the government to implement all Base Erosion and Profit Shifting (BEPS) actions proposed by the Organisation for Economic Co-operation and Development (OECD) in Hong Kong as soon as possible. By doing so, it can fully eliminate potential cross-border tax evasion and tax avoidance, which are depriving governments of the resources needed to alleviate poverty within their borders. 

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About Oxfam
Oxfam is a worldwide development organisation that mobilises the power of people against poverty.

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