The government announced the latest Budget today. Facing consecutive fiscal deficits, the government has proposed a “reinforced version” of the fiscal consolidation programme to strictly contain public expenditure. This includes adjustments to the Government Public Transport Fare Concession Scheme for the Elderly and Eligible Persons with Disabilities (HK$2 Scheme) such as limiting of the number of concessionary trips per month. Oxfam Hong Kong (OHK) asserts that the HK$2 Scheme facilitates elderly participation in community activities, stimulates consumption and employment, and aligns with the government’s policy initiative to develop the “Silver Economy” outlined in the latest Policy Address. OHK suggests that the government evaluate the long-term effects of these adjustments on the behaviour of elderly individuals to ensure the policy promotes the “Silver Economy” effectively.

Additionally, the government has announced the abolition of the HK$2,500 Student Grant. OHK believes this decision will adversely affect grassroots students. This underscores the importance of retaining the poverty line, and we urge that the government reinstate the poverty line as a foundation for resource allocation.

According to the “Hong Kong Poverty Report 2024: Pathways out of Adversity – Embracing Change through Transformation” issued by OHK, the poverty situation and wealth gap in Hong Kong continue to worsen amidst changing population structures. During times of fiscal deficit, ensuring that the welfare expenditure for grassroots communities remains unaffected is the crucial first step in preventing the problem from deteriorating.

"We acknowledge the government's efforts amidst fiscal deficits. However, it is essential to ensure that impoverished students continue to benefit from the student grants. Considering the increasingly complex poverty issues, we recommend the government persist in advancing poverty alleviation initiatives through tripartite collaboration to consolidate resources aimed at supporting those in need and reducing barriers for grassroots from entering the workforce. This approach will foster a sustainable and long-term balance between economic recovery and social development,” said Kalina Tsang, Director General of Oxfam Hong Kong.

OHK proposes the following recommendations:

Propelling Silver Economy for Ready Elderly to Enter the Labour Market

According to our latest poverty report, the elderly labour force participation rate stood at 13.9%, significantly lower than those of mainland China (25%) and Norway (22.2%). Therefore, we suggest that the government simplify the application procedures and conditions for the Employment Programme for the Elderly and Middle-aged, to encourage employers to hire elderly individuals. For example, streamlining the administrative process by cancelling prior registration and allowing employers to apply for the allowance directly after recruitment.

Regarding the HK$2 Scheme adjustments which includes a monthly trip limit, we believe that concession helps elderly people participate in community activities and promotes consumption and employment. We suggest that the government evaluate the long-term effects of these adjustments on the behaviour of elderly people, ensuring the policy promotes the "Silver Economy” effectively.

Enhancing Childcare Services for Women to Engage in the Labour Market

This year's Budget also emphasises women's development, such as the “Women Empowerment Fund”, which we believe will help enhance women's employability. In the long term, the government should encourage different sectors to design more programmes for economically inactive women, alongside improving childcare services to enable them to realise their potential in the workplace and increase their income through employment.

We are pleased that the government is implementing initiatives to unleash the female labour force, such as launching the School-based After School Care Service Scheme (the Scheme) and setting up more aided standalone Child Care Centres. The Scheme, led by the government and operated by NGOs in school venues, has received excellent responses, reflecting significant demand for this service. Recognising the importance of this service in motivating female labour force participation, we urge the government to expand service quotas across Hong Kong's 18 districts to reduce employment barriers for women, enabling more grassroots women to escape poverty through work.

Voluntary Living Wage Level Released by Government

Employment is a critical factor in poverty alleviation and is significantly influenced by wage levels. The government recently announced an increase in the statutory minimum wage to HK$42.1 per hour. OHK believes this level is still about 18.6% lower than the average Comprehensive Social Security Assistance (CSSA) payment and provides inadequate protection. In the long term, the minimum wage should be set above the CSSA level.

Since 2018, OHK has championed a Living Wage initiative to promote a wage level that enables employees and their families to meet basic needs and maintain a decent standard of living. We encourage employers in Hong Kong to voluntarily offer a living wage. The latest rate (2024) is HK $61.5 per hour, and the rate level is adjusted annually based on inflation and consumer spending patterns.

OHK emphasises the importance of tripartite collaboration and recommends that the government announce a living wage rate alongside the minimum wage. These would provide employers with essential information, encouraging them to voluntarily offer a living wage, protect employees’ basic quality of life, promote mobility and help employers attract potential labour.

Driving Tripartite Collaboration through the SIE Fund for Poverty Alleviation Projects

Given the constraints of public finances, OHK recommends that the government promote tripartite collaboration projects involving the government, businesses and the community, pooling resources to support grassroots communities through the Social Innovation and Entrepreneurship (SIE) Fund. We suggest referencing Oxfam's Pay-for-Success (PFS) initiative — the “Start from the Beginning - Chinese Supporting Scheme for Non-Chinese Speaking Students (NCS) in Kindergarten”— which has successfully linked businesses and emerging social enterprises to co-design and collaborate, significantly benefiting those who are experiencing poverty. The government can actively adopt this innovative model to develop more effective social projects and consider applying it within the “Targeted Poverty Alleviation” framework to launch more initiatives for the elders, subdivided flat residents and single-parent families.

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About Oxfam

Oxfam is a global organisation committed to creating a world without poverty through its advocacy, development and humanitarian work.

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