Outgo has two major jobs: one is the societal public assistance may maintain addition and may be a load to the system. One is some budget usage it in unsuitable manner, like the low efficiency between section and section.
Financial Burden cause by Social Welfare
Hong Kong is non a public assistance province, but the state of affairs need that the authorities to set more budget to societal public assistance. In Hong Kong, we have medical services, instruction, public lodgings, societal allowances, social services and so on. That ‘s why the authorities province the sentence like this:
“ Hong Kong is non a public assistance province but the community cares profoundly about its province of public assistance. ”[ 1 ]
But the state of affairs like population jobs, economic environment will impact the demand of the societal public assistance.
Population Problems
Presents, Hong Kong Government needs to confront the popular job which is called popular ripening. Popular aging agencies that there are more big retire to go senior in the society. In Hong Kong, there is much public assistance for the senior. However, it is a job on our public fiscal system due to the fact that our authorities needs to look after the senior people. The authorities needs to back up the senior on wellness job and retirement protection when the population ripening is happening in Hong Kong.
Health job on aging
When senior becomes older and older, they will hold more and more wellness jobs such as Alzheimer ‘s disease, Benign Prostatic Hyperplasia, BPH, DDM, Degenerative arthritis, bosom disease, high blood force per unit area. Some diseases are danger to the senior ‘s life such as bosom disease. Some disease may do to other disease such as DDM and high blood force per unit area. If the senior demand to maintain wellness, they need to take the medical specialties every twenty-four hours. In fact, the costs of medical specialties are increasing due to the rising prices. An senior can non afford it because most of them are retired such that they do n’t hold much more income ; hence, they need to travel to public clinic to obtain a cheaper medical support which is back uping by authorities.Hence, there are much more medical specialties required by those old work forces and the medical outgo will increase when a adult male become elder.
Retirement protection
Nowadays, our authorities needs to give money based on retirement subsidies. The subsidies promoted in 1973. There are $ 625 on normal old age allowance per month and $ 705 higher old age allowance per month. There is a means trial on a normal old age allowance. Now, both of the old age allowances are $ 1090 per month. In 2010-11, 693,758 seniors have the allowance on old age allowance. It shows that authorities spends much more on seniors ; nevertheless, if the population of Hong Kong keeps on aging, it is a load on our public fiscal system if the authorities keeps on the retirement protection.
On the other manus, there is much voice on call offing the means trial of the normal old age allowance in this twelvemonth. If the agencies trial is cancelled, more seniors can obtain the normal old age allowance. The outgo of societal public assistance will increase. During the clip passes, the load on our public fiscal system will increase if the agencies trial is cancelled.
Economic Environment
Why the economic environment will do the addition of demand of societal public assistance? It is because the environment may impact the employer will or will non to use the new staff or disregard the old employee. On the recent months, the environment is non really good because of the European Sovereign Debt Crisis that started from Greece and influence on about whole Europe. In the authorities said the effects of the crisis may be influence to the planetary economic system if the debts may default or go out from the Eurozone[ 2 ], merely like what we faced in the Financial Tsunami in 2008 in America, the company winding-up and do the planetary economic system being more worse. But how can impact to Hong Kong? Harmonizing to latest presentation of Hong Kong Economics ( 2012 )[ 3 ], it stated that the Euro is the universe largest economic system, if it being worse, it may impact the whole economic system, like Mainland China, and Hong Kong besides becomes diminution somewhat, the existent GDP growing per twelvemonth will be around 1-3 % estimated by the authorities[ 4 ]. But how can it associate to the demand of societal public assistance? Since the aging job will do the old age allowance to give more, the medical besides need to take more portion to attention of the aged. But the worse economic environment will do many jobs, like the shortages, unemployment, and prudent investing. At that minute, people may desire to hold much more better life during the crisis. So the demand of societal public assistance will be increase. Figure 1 shows that the figure of instances of CSSA strategy increased aggressively from financial twelvemonth 2001-2004, that is the clip of Dot-com bubble ( c§‘c¶?e‚??????« ) and eruption of SARS. Those clip the economic environment non really good and many people unemployed or other things affected by the crisis. And the addition of the instances of CSSA was in financial twelvemonth 2008-2009, that is the clip of winding-up of Lehman Brothers Corporations, it cause the planetary economic system be more worse, particularly in the United State. The consequence towards Hong Kong was in first one-fourth of 2009, that clip the economic system become worse, but the degree may non look like in the before crisis. The figure shows that when it in fiscal crisis or something affects the economic environment, the people may will to utilize more societal public assistance.
Figure 1 Number of instances of the CSSA Scheme from financial twelvemonth 2001-2012[ 5 ]
So that two sorts of job may do the big demand of utilizing the public assistance. But we can look back for the authorities policies or Financial Budget. We still can see the authorities may non hold a long-run planning to assist the needy. Like what ‘s the job in Education and Social Welfare portion.
Education
In Education, fundamentally include primary, secondary school, and such sort of third instruction. In the Financial Budget 2012-13, this portion may take around 60 billion, is the 23 % of the estimated budget[ 6 ], but most of that are subsidies. The subsidies used for the little size learning on primary school, the 3-3-4 instruction establishment reform on secondary school, and the fiscal back up for pupils.
Social Welfare
In societal public assistance, include the allowances, and other public assistance outgo[ 7 ]. Allowances include CSSA strategy for underprivileged people and SSA strategy for aged and disablements, this portion already used about 30 billion, which means it used approximately 11 % of the budget[ 8 ]. Other welfare outgo include the social services and other subsidies apart from CSSA and SSA, it include around 15 billion and 6 % of budget[ 9 ]. Basically, the budget of the societal public assistance about is the subsidies like the allowance, pensions for retirement.
To sum up, societal public assistance is need for every states or metropoliss, even in Hong Kong. But some of the state of affairs if no any clear solutions to cut down, it may be the following crisis of the public finance system.
Operating Outgo addition by the low efficiency bureaucratic system
There are many sections in Hong Kong Government ; nevertheless, the sections work inefficiently because the work is repeated on some of the sections. Hence, the unneeded outgo addition cause the section does non work effectual. There are 2 sorts of inefficient grounds which are ill-defined work distribution on section and subdivision such as Labour and Welfare Bureau, Social Welfare Department and Food and Health Bureau ( Food Branch ) and ( Health Branch )
Reform
For Population Problem
To work out the fiscal job of the popular ripening, authorities should promote the seniors to hold in-migration to other states. They will non utilize local medical support if they have any unwellness. The medical outgo will diminish.
On the other manus, authorities should maintain on holding the means trial of the normal old age allowance. Most senior who have Mandatory Provident Fund Schemes ( MPF ) will non entree the normal age allowance ‘s agencies trial. Then fewer seniors can hold the normal age allowance, and the public assistance outgo will diminish.
Non-contributed to be contributed outgo
In the yesteryear, the Hong Kong authorities, even in colonial authorities or SAR authorities hold given a batch of societal public assistance to the citizens. But nowadays the hongkongers may believe that we besides can hold contributed to their societal public assistance. In the past, we have revenue enhancement to roll up and set it to the needfully parts. Now, the authorities may believe that the outgo possibly excessively rough to run the authorities, so that we need to lend to the societal public assistance by ourselves.
MPF and Retirement Protection
We besides have a contributed fund that to assist for the people who retirement, that is MPF ( Mandatory Provident Fund ) , but about the citizens argue that the MPF may non gain more money, even less, that may do the metropolis urged the authorities to let go of the retirement protection. But the elaborate of the protection strategy, that ‘s average how the strategy operate, the employee and employer whether demand to pay or non, the authorities need to pay for the history holders or non, may non hold a consensus.
Education Fund and Medical Fund
These two sorts of fund besides is a sort of contributed outgo excessively, but it may concerned by the citizens to pay excessively much for the contributed history. In Hong Kong, they may desire to pay for a fund that simple and include kind of things, and largely inexpensive.
Singapore ‘s Example
The contributed history includes two: Normal history and Medical history. The salvaging involvement of two histories is controlled by the national bank. And the employer, employee and the authorities will hold to pay some for the history. In 2004, the part of paying salary between employer and employee is 17 % :23 % , that ‘s mean the payment by the employer and employee is 40 %[ 10 ]. But something that differ from Hong Kong is the Singaporeans can take a portion of modesty to purchase lodging, put and pay for the educational and medical usage since they set a line to halt take out excessively much and for utilizing after the retirement.
The system of Hong Kong and Singapore is rather similar, but Singapore has more flexibleness to allow them utilize the money of their history. Hong Kong can seek to larn from this.
Macau ‘s Example
Macau besides has the contributed history excessively, that ‘s the Central Provident Fund, and it started at 15th October, 2012[ 11 ]. Before this, it has Central Saving System[ 12 ]. The history is similar to Hong Kong, but the Macau authorities may replace to the history that can assist the holders to hold better life. But differ from Singapore, they can non take out the money until 65 old ages old, except for the blessing that to turn out you have or have non disablements.
Possible Reform
In our position, we may believe that we can seek to hold a contributed history that to assist people for different sorts of societal public assistance.
The history demand to hold three sorts of constituent to pay for: employer, employee and the authorities ( if in demand ) . The payment may differ from the MPF, since the per centum of wage for the history is 10 % per month, but we may allow the 40-64 old ages old people who worked can allow them to pay less and salvage more for the life usage, and the employer may increase the part to suit the 10 % per month.
This sort of strategy may administer from different sorts of age group:
Age Group
% of wage of employee wage for1
% of employer wage for by the employee ‘s salary1
$ 2 of the authorities wage for1
0-18*
–
–
$ 1,000
19-39
( Worked )
5 %
5 %
—
( Not Worked )
–
–
$ 500
40-49
( Worked )
5 %
5 %
–
( Not Worked )
–
–
$ 1,000
50-59
( Worked )
4 %
6 %
–
( Not Worked )
–
–
$ 1,500
60-64
( Worked )
3 %
7 %
–
( Not Worked )
–
–
$ 2,000
65 or more^
–
–
–
Assume this type of people may non hold work accomplishments.
^ This type of people can take out the money from their history
1 By monthly,
2 For the kids, adolescence, and the non-workers
Table 1 Contributed Account Payment for different age group ( Idealized )
In the contributed history, it similar to the MPF, but besides differ from the MPF. The history chiefly is a salvaging history, but if the history holders agree, the fund holders can take a portion of their money to put, but merely 10 % of their history. Besides, we can larn from the Singapore, which is the histories holders can take out some money out of their history for their exigency usage, but set a line to avoid take excessively much money in their history, it may put to 60 % of the latest balance, because we may believe that some of the history may non hold excessively much money at that place, besides we non like Singapore to pay for 40 % , we still have to put a line that can allow people utilize after age 65. If they take already over the line, the bank or the authorization may direct a missive to state that the history will non take action to allow holders take money out because the balance over the take-out line.
The contributed history have one per people merely, two histories if people willing to take portion to put, even workers or non-workers, they can hold different permutation than the employer-employee one, like to give some money to them, the manner like Macau, but is to assist the non-worker and the 50-64 year-old workers merely.
The strength of the new history is can assist some needfully people they need to utilize, besides the authorities can make as a protagonist to back up some needfully people and can protect people to avoid the job of MPF, besides the history can assist to hold a sense to salvage money to hold better life, even more better.
However, it besides has some proficient failings, like the involvement can non put actively, because the involvement rate demands to follow by the US ‘s involvement rate because of the link exchange rate system. That ‘s why we think that the history needs to put the line in 60 % . Besides, if you want to hold investing on the history, as we think before, we can non take more than 10 % of the history to make investing, but besides the job, you may necessitate to organize one more history to make investing, if put together, it may hold some problems occur. That may impact the credibleness of the history. Besides, the authorities demand to utilize more outgo to make this, because if you willing to utilize the societal public assistance, the authorities may necessitate to pay more for the public assistance. So it may hold some problems like the shortages.
To sum up, we may believe that this program may non be a really prefect program, but can cut down the job of the recent strategy. We try to equilibrate the demand of the retirement protection strategy and other sorts of contributed outgo ; we think that one salvaging history can assist people to retrieve the history really good.
Improvement of bureaucratic system
The manner to avoid the inefficient bureaucratic system is reforming the bureaucratic system. Government need to cut the unneeded section and unite the similar section into a section. Cut the unneeded adult male power is a sort of reforming. If the figure of the sections and each section ‘s outgo lessening, it is effectual on equilibrating the outgo.
