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Tuesday, January 17, 2017, 22:46

Next CE needs to address housing and poverty

By Paul Yeung

Paul Yeung writes that the next Chief Executive must continue the work started by Leung Chun-ying in trying to deal with the difficult challenges of overcoming poverty and providing affordable housing in Hong Kong.

With the March Chief Executive election drawing near, enthusiasm is running high for guessing who will be the next CE, particularly after the incumbent, Leung Chun-ying, decided not to seek re-election. But instead of playing a guessing game, it is far more important to discuss the policies the next CE needs to adopt.

Next CE needs to address housing and poverty Although Leung is leaving, his policies should continue. Let’s look back to five years ago. Leung promised in his Manifesto for the Chief Executive Election 2012 to bring significant changes to Hong Kong. He said that the government should have the determination and foresight to meet public demand for housing supply, change people’s thinking on and adjust practices in planning to assess demand for land, as well as to study and adopt measures to alleviate the causes of poverty.

We have observed ongoing changes in the past few years. For housing, based on the Long Term Housing Strategy released in 2015, the government adopted a housing supply target of 460,000 units for the 10-year period starting from 2016-17. The ratio of public housing to private housing was set at 60:40, which addressed public expectations. The estimated total public housing production in the five-year period starting from 2015-16 is higher than that in each of the previous three five-year periods.

Housing plans cannot be implemented without sufficient land supply. The government is determined to increase supply by different means. It had identified 150 potential housing sites, announced in the 2014 Policy Address, which are capable of providing over 210,000 flats (of which more than 70 percent are public housing units). For long-term planning and strategy, the “Hong Kong 2030+: Towards a Planning Vision and Strategy Transcending 2030” document was released a few months ago. It aims to develop Hong Kong into a competitive, livable and sustainable Asian world city by saving land for future use.

Besides the housing shortage, poverty is a long-standing social evil in Hong Kong. Two essential tools have been created to fight this scourge. The first one is the Commission on Poverty set up in 2012 and the second one is the official poverty line established and then published in 2013. With the help of these tools, the Chief Executive announced in the 2014 Policy Address a series of initiatives to tackle poverty. These cover a broad range of areas and benefit various groups. For instance, the Low-income Working Family Allowance Scheme was launched last year to provide financial support to low-income working families, encourage self-reliance and also ease intergenerational poverty. In fiscal year 2016-17, the government’s recurrent spending on social welfare reached HK$66.2 billion, accounting for 19 percent of recurrent expenditure. Compared with HK$42.8 billion spent in 2012-13, welfare expenditure has increased significantly by 55 percent.

With those efforts, the number of the population who are poor has remained below 1 million since 2014. By the end of April 2016, the overall caseload under the Comprehensive Social Security Assistance Scheme registered a continuous decrease for 61 months to 242,308 cases, which is the lowest in 14 years. Moreover, the cases of low-income households recorded a continuous decrease of 86 months to 5,950 cases. This is the lowest in 17 years. It shows that the government can make a difference.

There is not only good news, however. Understandably, Leung has yet to fulfill all of his promises to tackle the city’s deep-seated social problems as these are indeed too challenging. Five years is too short a period for him to finish the job. The annual long-term housing strategy progress report published last month reveals the difficulties of this challenge. The government only identified enough land to build 236,000 flats by 2027, falling short of the 255,000 it forecast last year. Secretary for Transport and Housing Anthony Cheung Bing-leung admitted that this shortfall served as a warning that it was getting harder to find land in Hong Kong.

The poverty issue is also worrying. The above-mentioned achievements are just a battle won, the war on poverty has not ended. The city’s Gini coefficient in 2011 was 0.537, which marked a historical high in Hong Kong and the highest among developed economies. The figure for 2016 has not been released, but income disparities are expected to remain a major social problem.

Robert Frost wrote in his classic 1920 poem The Road Not Taken: “Two roads diverged in a wood, and I — I took the one less traveled by, and that has made all the difference.” Five years ago, we took a road to find a better Hong Kong with a better living environment and fewer poor households. Even though a gap still exists between the goals and reality, we should be determined to continue on this journey. The next Chief Executive has to face reality on the one hand, and allow us to progress with our goals on the other.

The author is research officer of the One Country Two Systems Research Institute.

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