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Wednesday, October 12, 2016, 18:26

Oxfam urges govt to address growing poverty gap

By Wang Yuke

HONG KONG - A social service provider has urged the government to review its welfare policies to address the widening wealth disparities in Hong Kong.

The wealth disparities in the city worsened from 2011 to 2015, according to Oxfam Hong Kong, an organization that provides assistance to underprivileged residents.

The Hong Kong Poverty Report 2011-15 released on Tuesday revealed that the number of poor households had jumped to 460,000 in 2015, up by 6 percent from 2011.

A social service provider has urged the govt to review its welfare policies to address the widening wealth disparities in HK

There were 230,000 poor families having members aged 65 or above, with the number rising by more than 14 percent compared with 2011. Among these families, nearly 60 percent were one- or two-person households, with the figure jumping by 25 and 18.6 percent, respectively.

Among households with elderly people and monthly incomes lower than the eligibility requirement stipulated in the Comprehensive Social Security Assistance (CSSA) scheme, only 54 percent successfully applied for CSSA.

Working poor households were another focus of the report. It found that the number of working poor families with one employed person had skyrocketed by 44 percent within the five years. This meant more employed individuals had to support two jobless family members.

More worryingly, more than half of the working poor households earned a monthly income that was below the average CSSA payment for household of the corresponding size.

Inflation also affected these families’ incomes as the minimum wage failed to catch up with rising prices, causing poor households to struggle during the five years.

In response to deteriorating income disparities, Oxfam Hong Kong called for the government to revisit its policies to ease the economic burden inflicted on poor working families.

The government was expected to scrap the Mandatory Provident Fund (MPF) offsetting mechanism due to concern that HK$13.6 billion in MPF contributions was offset by employers. It is believed that continuing it will lead to the impoverishment of low-income workers after retirement. Oxfam Hong Kong proposed that the government minimize the MPF offsetting mechanism ratio in phases before abolishing the mechanism.

The organization also suggested the government reconsider the minimum wage to ensure it can keep up with the inflation rate. Researchers of Oxfam believed that only if the minimum wage threshold is above the CSSA payment level could those low-paid people be likely to make ends meet.

While the Minimum Wage Commission reached a consensus on Oct 7 that the minimum hourly pay should be raised to HK$34.5 by 2017, Oxfam researchers declared that it was still not enough to make a significance difference. What's more, rising inflation will weaken the impact of a slightly increased minimum wage. Oxfam investigators concluded the hourly minimum pay should be set at HK$35 or above.

Furthermore, the poverty line should be reviewed by taking the basic costs of living into consideration, researchers suggested. At present the official poverty line is set at half of the median monthly household income. It has been proved that the purchasing power of low-income families dropped significantly from HK$32.5 currently to the equivalent of HK$26 in 2010.

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