HK to Raise Pension Payouts
The Straits Times
October 24, 2008
Hong Kong announced a surprise increase in social welfare payouts for the city's elderly on Friday as the city's economic outlook dims.
With Hong Kong officials and economists warning of an impending recession as soon as this quarter, the city's leader Donald Tsang bowed to public pressure on Friday and said he would provide more support to the needy by raising the Old Age Allowance by around 30 per cent to HK$1,000 (S$193) a month for those over 65 years of age.
'During this trying period, Hong Kong should stand united and focus its energy on economic issues. To add to the worries of our senior citizens is the last thing I want,' Mr Tsang said.
Mr Tsang said he would also shelve proposed means testing for this payout, given an 'overwhelmingly negative' outcry that saw hundreds of angry pensioners hit the streets this week.
'If I continue this debate, the community will become even more divisive,' Dr Tsang told reporters.
The number of Hong Kong citizens aged 65 or over is expected to more than double to 2.17 million by 2033, or around one quarter of the city's expected population.
The government has said this higher payout would cost the government HK$14 billion per year by 2033 and pose a 'considerable burden to public finances in the long run'.
The measures were announced despite Hong Kong's inflation rate easing in Sept to 3 per cent, thanks to temporary waivers on public rents and an electricity subsidy. Citigroup recently cut Hong Kong's 2009 economic growth estimate to 2.8 per cent from 3.8 per cent, while the Hong Kong General Chamber of Commerce projected growth of 0 to 1 per cent.
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