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Monday, Sep 21, 2020

One in five Hongkongers living below the poverty line in 2018, as concern groups warn falling economy may cause situation to get worse

Following policy interventions, the number dropped from 1.4 million to just over 1 million but still remained higher than 2017 figure. Number of people below poverty line highest in a decade

More than 1.4 million people were living below the poverty line in Hong Kong in 2018, a 10-year high, with the government warning that the weakened economy may have further repercussions on grassroots’ earnings.

The Hong Kong Poverty Situation Report, released by the government on Friday and coinciding with a meeting held by the Commission on Poverty, showed a rise of 0.3 percentage points to 20.4 per cent.

The figure was the second highest since records began in 2009, when the rate was 20.6 per cent.

Representatives from a concern group, as well as a lawmaker and a scholar, slammed the government for not doing enough to solve the problem.

The government attributed the increase to an “acceleration of the population ageing ”.

“[Such conditions] offset the positive effects brought about by favourable economic and employment conditions and our efforts to alleviate poverty,” a government statement said.

It warned the deteriorating economic climate in the city could further affect low-income livelihoods.

“The local economy has weakened visibly, which will likely have repercussions on the earnings and employment prospects for the grassroots,” the government said.

The city’s retail and tourism sectors have been hard hit by more than six months of anti-government protests, which officials estimated would cost the city 2 percentage points on its gross domestic product.

The government forecast the GDP would shrink 1.3 per cent this year from 2018. Last year, it jumped 3 per cent from 2017.

Past statistics showed 1.377 million residents were living below the official poverty line in 2017, 25,000 more than the figure in 2016.

The poverty line is set at 50 per cent of the median monthly household income before taxation and government policy interventions, including social welfare payments, such as allowances for the elderly and low-income families.

In the latest terms, that means a single person with a monthly income of HK$4,000 or a two-person household earning HK$10,000. The threshold for a three-person household is HK$16,500 a month.

The number of impoverished Hongkongers in 2018 dropped to 1.024 million after policy interventions, such as the Comprehensive Social Security Assistance (CSSA) and Old Age Living Allowance, but the figure remained 15,000 higher in 2017.



For many poor elderly in the city, the intervention did little. About 20,000 more than in 2017 remained below the poverty line.

The government said many in this demographic lived without any income, so even government benefits were unable to plug the gap to the poverty line .

The post-intervention poverty rate among those aged 18 to 29 also saw a year-on-year increase of 0.5 percentage points to 9.3 per cent, meaning around 90,000 young people living in poverty.

But the child poverty rate, after intervention, fell by 0.7 percentage points to a record low of 16.8 per cent.

The government attributed this to additional subsidies under the Working Family Allowance scheme.

Lee Tai-shing, a representative from the Concerning CSSA and Low Income Alliance, accused the government of failing to curb poverty and expected more people to fall below the line in the future.

“One-off allowances do not help much. The government could at least help these people by raising the minimum wage,” Lee said.

Labour Party lawmaker Fernando Cheung Chiu-hung said Friday’s report showed the situation last year, when the economy was good, and expected the situation to have become even worse this year.

“The current poverty relief measures have failed to decrease the poor population. This is a big problem which every term of government tries to do something about but fails,” Cheung said.

He said the reasons included the failure to adopt a universal pension scheme shown by the high poverty rate among the elderly.

The CSSA, which has not been reviewed for more than 20 years, also failed to provide enough support to the needy or remove people from poverty, Cheung said,

Professor Paul Yip Siu-fai from the University of Hong Kong said the latest figures showed the efficiency of recurrent cash was not that high, as such policy intervention could only reduce the poverty population by around 27 per cent.

“It is important to teach them how to fish, instead of giving them a fish,” Yip said, noting that more than half of the poor aged 25 to 29 were jobless, but 90 per cent had completed their studies.

“We need more job diversity to fit the different skill sets our youth have. Helping them to establish start-up companies is one solution. They need jobs with a future.”

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