Hong Kong's Tsang Unveils Handouts for Poor, Narrowing Record Wealth Gap
Hong Kong Chief Executive Donald Tsang unveiled new policy initiatives to help residents who haven’t benefitted from the territory’s economic recovery.
Responding to the widening wealth gap in Hong Kong, the government will provide transport subsidies for commuters, expanded medical services for the elderly, and will make housing ownership more affordable, Tsang said in his annual policy address broadcast live on local television.
“Social tension in Hong Kong stems partly from the wealth gap,” Tsang said. “The wages of some low-educated and low- skilled workers have continued to lag behind economic growth.”
The number of people living in poverty rose to a record 1.26 million, or about 18.1 percent of the total population, in the first half of 2010 from 1.2 million last year, the Hong Kong Council of Social Service said in an Oct. 3 report.
Inequality is rising even as the city with a population of 7.15 million recovers from its deepest recession in more than a decade. Hong Kong’s gross domestic product climbed 6.5 percent in the second quarter from a year earlier. The wealth divide is the most pressing social problem in Hong Kong, a July survey of 894 residents by the Chinese University of Hong Kong found.
Hong Kong plans to enact its first minimum wage this year in an effort to address the biggest gap between rich and poor in Asia. Industry groups say businesses cannot afford to pay more than HK$24 ($3.10) per hour, while labor groups have called for a wage floor of HK$33.
Home Support
Tsang said the administration will offer a subsidy for buying a home equivalent to one half the rent paid during the previous five years by families living in government housing. Home prices have surged more than 48 percent since the beginning of 2009.
He also announced relief for low-income commuters, offering an annual transportation subsidy of $600 for eligible employees for the next three years. He did not elaborate.
Tsang’s remarks come against the backdrop of deteriorating air quality. Air pollution this year may kill more than twice the 299 people who died during the SARS epidemic in 2003, according to figures by the University of Hong Kong’s School of Public Health.
Noting that buses are the biggest source of roadside pollution, Tsang said the government will pay for the purchase of six hybrid buses as part of a pilot program. It will also subsidize retrofitting of existing diesel buses with catalytic converters.
To contact the reporter on this story: Frederik Balfour in Hong Kong at fbalfour@bloomberg.net
To contact the editor responsible for this story: Bill Austin at billaustin@bloomberg.net
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