Give and take on jobless subsidy
Discussions on canceling the MPF offsetting mechanism will have to be suspended if the government is to pursue a subsidy for the unemployed, Secretary for Labour and Welfare Law Chi-kwong said.
At a Legislative Council subcommittee meeting discussing the matter yesterday, Law denied that this statement was a threat because the two proposals are contradictory to each other.
Several lawmakers on the subcommittee said that existing policies have been ineffective in solving the high unemployment rate and criticized the government for blocking the establishment of a temporary unemployment subsidy.
One of them, Wilson Or Chong-shing of the Kowloon East geographical constituency, said a temporary unemployment subsidy should be set up or the unemployed should be allowed to apply for comprehensive social security assistance individually.
In response to lawmakers' criticisms, Law said the government has conducted research and discussions on an unemployment subsidy and "unemployment insurance systems." "If we have to deal with it, to put it simply, we would have to suspend preparations for the scrapping of the Mandatory Provident Fund offsetting mechanism," he said.
The MPF offsetting mechanism allows employers to take money from employees' pension funds to offset severance and long-service payments if workers are sacked or the company closes down.
Law said last November that legislation regarding canceling the MPF offsetting mechanism was expected to be introduced to Legco by the end of 2021, with its implementation due in July 2022.
"This is not a threat," Law said. "Since there has to be a change of policy for [unemployment insurance system], then consultation work has to be done. If we carry out consultations, how can we simultaneously amend a policy that contradicts it?"
In regards to setting up a temporary unemployment subsidy, Law said the negative impact of setting up such a system that carries a time limit "could be greater than helping people," as it could create moral hazards and cause the local working population to be unable to meet the needs of economic growth in the future.
According to the latest figures released on March 16, the average unemployment rate for the period from December 2020 to February 2021 after seasonal adjustment was 7.2 percent.
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