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Providing for the Future
175. The final area is to make preparations to meet future challenges to public finances. I mentioned earlier the pressure that economic fluctuations and an ageing population will bring to bear on public finances. Therefore, if our financial position permits, we should take measures now that will ease the pressure on public finances in the long run.
Retirement Protection
176. The Government introduced the Mandatory Provident Fund (MPF) Scheme in December 2000, with the aim of assisting our working population to save part of their income for investment to help safeguard life in retirement. Upon implementation of the MPF Scheme, Hong Kong has in place the "Three Pillars" for retirement protection advocated by the World Bank, the others being the "social safety net" long established by the Government and personal savings and insurance.
177. However, I understand that some people faced with the need to make ends meet may not have any extra money to save up for their retirement life after making statutory MPF contributions. To demonstrate the Government¡¦s commitment to enhancing retirement protection and relieving the pressure on social welfare expenditure in the long run, for employees and self-employed persons who currently have MPF accounts and who each earns not more than $10,000 a month, I propose to make a one-off injection of $6,000 into their MPF accounts.
178. At present, members of some occupational retirement schemes do not have MPF accounts. If their occupational retirement scheme is a defined contribution scheme, their accounts under such a scheme will also be entitled to the proposed fund injection. The Financial Services and the Treasury Bureau will announce the details.
179. I have earmarked $8.5 billion to implement this measure. It requires amendment to the existing Mandatory Provident Fund Schemes Ordinance. I expect that the funds will be injected into the MPF accounts in 2008-09 upon completion of the relevant procedures.
Health Care Financing
180. Health care is the area that presents the greatest challenge to the stability of long-term public finances in this city because of an ageing population. The Secretary for Food and Health will conduct a public consultation on health care reform, in which various service reform proposals and different supplementary financing options will be put forward for public discussion. The Government is committed to increasing the share of health care expenditure to 17 per cent of its recurrent expenditure by 2012. Since the Government cannot increase public health care expenditure indefinitely, we hope that supplementary financing arrangements can be implemented that ensure the availability of adequate resources in our health care system to cope with the community¡¦s demands in the future, and enable us to uphold the established policy of public health care that no one with financial difficulties will be denied proper health care.
181. I hope the community will understand the urgency of health care reform and reach a consensus through pragmatic discussions. Inevitably, better-off people will have to pay more for their health and medical services. However, the Government promises to share the burden under the supplementary financing arrangements. Furthermore, we will provide support to the health care service and market reform to enable those people who shoulder more burden to enjoy more choices and better services.
182. After the implementation of supplementary financing arrangements after consultation, no matter what the final arrangements are, I pledge to draw $50 billion from the fiscal reserves to assist the implementation of health care reform so as to help meet this major challenge to future public finances. For example, if the selected arrangement allows citizens to join a contribution scheme, I will inject this money as start-up capital for every citizen who joins the scheme. This will demonstrate the Government's determination to share the healthcare financing burden with citizens.
183. This concludes my major expenditure and revenue proposals.
(To be continued)
Ends/Wednesday, February 27, 2008
Issued at HKT 12:34
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