SINGAPORE- Marking a “philosophical” shift in official attitudes on how poverty can be eradicated, the Hong Kong government will be supplementing the wages of its working poor, Workfare-style.
This, together with an existing minimum-wage policy, will form a sturdy safety net for the city’s poor going ahead, say observers.
The new scheme – which will cost HK$3 billion (S$492 million) a year – was a centrepiece in Hong Kong chief executive Leung Chun Ying’s annual policy address yesterday to set out his government’s direction for the coming year.
Called the Low-income Working Family Allowance, the policy will benefit families that fall at or are under the new poverty line drawn up four months ago – half the city’s median household income, which stands at HK$31,000 for a family of four.
To incentivise self-reliance, at least one family member must work. And the longer he works, the more the family gets from the government. Those who put in more than 144 hours a month get HK$600; those toiling over 208 hours receive HK$1,000.
If there are children in the family, including students under 21 years of age, an additional allowance of HK$800 per child is given.
There is no age floor, unlike in Singapore where workers must be aged 35 and above to qualify for the Workfare Income Supplement. Payouts are provided in cash.
In all, some 200,000 low-income families with 710,000 members will benefit, said Mr Leung.
Speaking to the foreign media, Chief Secretary Carrie Lam said that the scheme is meant to help kick-start social mobility, given anecdotal evidence that there is greater inter-generational poverty today.
Previously popular notions of “trickle-down economics” have fallen out of vogue, she said. “There’s a philosophical change, a recognition that economic growth does not provide all the answers.”