Eighty-six years old and still job hunting. Wong Siu-ying had to stop passing out leaflets on a Hong Kong flyover when she hurt her knee in August. With two-thirds of her social security income spent on rent and no steady allowance from her three children, retirement isn’t an option.
“It isn’t enough,” Wong said of the roughly HK$2,200 ($284) a month she gets from the government, which provides a benefit to the elderly as a supplementary income, with the expectation families will pay for living expenses. “The most important thing is to find work.”
In a city with the most Rolls Royce cars per capita, Wong is among the growing number of elderly forced to sweep streets, collect cardboard for recycling, or hand out pamphlets to stave off poverty.
The Organization for Economic Cooperation and Development and World Health Organization forecast Hong Kong will have the highest share of population aged 65 years and over in Asia by 2050, outpacing Japan.
For Hong Kong chief executive Leung Chun-ying and his finance secretary, due to hand down the 2015-16 budget on Wednesday, pressure to help the city’s aging combines with more immediate risks including heading off renewed political turmoil after protests last year and girding for higher interest rates.
Rival financial centre Singapore on Monday announced plans to strengthen social security support for older and middle- income workers. The island’s demographic challenge mirror Hong Kong’s, with the median age of its citizens set to rise to 47 in 2030, from 39 in 2011.
Budget surplus
Offering Hong Kong some fiscal firepower is a budget surplus. Hong Kong-based Bank of America Merrill Lynch economist Marcella Chow estimated a surplus of about HK$62 billion, or 2.8 per cent of gross domestic product, led by revenue from stamp duties of property and stock transactions, land sales, salaries and business taxes.
“It is essential that the government adjusts the fiscal policy appropriately so as to address the pressures that may arise from an aging population and a declining labor force,” Chow wrote in a note this month. “However, given the government’s extremely conservative and prudent stance, there is little expectation of any revolutionary proposals.”
Even so, the prospect for higher interest rates in the US, followed in Hong Kong due to its currency peg to the greenback, raises the risk of undercutting revenue from property transactions that have kept government coffers flush.
Needing work
In the meantime, Fok Mei-song, who turns 65 next month, is in need of work. The grandmother of five said she is taking a break from cleaning the streets of Sham Shui Po, a densely populated working-class district, after her employer wouldn’t give her enough paid leave to recover from a knee injury. “My children have a lot of burden,” she said of her three sons, who aren’t able to give her additional spending money.
Hong Kong chief executive Leung in January asked the finance secretary to earmark HK$50 billion for future retirement financing needs. Even if enacted, that would be a long way from providing widespread coverage. “We cannot rely solely on the government for universal retirement protection,” Leung said in a policy address on Jan. 14. “We are therefore not optimistic a consensus on retirement protection financing arrangements can be reached.”
The Commission on Poverty will be seeking public feedback on the pension plans in the second half of this year. More than a third of Hong Kong’s elderly live in poverty, according to a government report in 2012. That compares with an average poverty rate of 12.8 percent in OECD countries, according to a 2013 report. Younger Generation Younger generations aren’t planning sufficiently for their own futures either.
One in five single workers in their thirties and forties in Hong Kong don’t have any retirement planning, according to an online survey conducted by Fidelity Worldwide Investment in 2013.
That will leave future generations in the same shoes as Lee Yuet-yan, who also has to worry about medical expenses for his wife’s respiratory illness. Now 79, the former cook is working six days a week as a building security guard. “I like my job and I can contribute to the society,” he said after completing a nine-hour shift. “I don’t get any government support and I can ask my children for money if I need it. But I’ll keep working for as long as I can.”
Bloomberg
