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CE's remarks on Old Age Allowance (with video)

     Following is the transcript (English portion) of remarks by the Chief Executive, Mr Donald Tsang, on Old Age Allowance at a media session today (October 24):

Chief Executive: Since my Policy Address last Wednesday, the issue of Old Age Allowance (OAA) has generated widespread public discussion.  

     I have tendered a few general directions for the review of the OAA. The suggestions are premised on the long-term sustainability of the policy and its impact on the public purse.

     I believe we need to rethink about the entire OAA regime, given the change in public perception on the allowance.  OAA is no longer taken as just a token of appreciation for the elderly, but more as a subsidy for them to make both ends meet.  With such a new expectation, it is necessary to consider the need for increasing OAA payments while introducing a means test mechanism.  

     The means-testing proposition has triggered serious reaction.  Many senior citizens are under the wrong impression that we are going to abolish the OAA altogether. They think we have betrayed the principle of respecting the elderly.  This is never my intention.

     I expected the topic to be controversial as it has a direct impact on the interests of the elderly people and the public at large.  Indeed, the Financial Secretary harped on the same theme in his annual Budget speech last February. It is not something new.

     By raising the issue in the Policy Address, I earnestly hoped to engage the community in a rational debate on whether we should use means tests to identify those elderly in need, so that we can allocate more resources to help them.  

     But the ensuing public reaction has been overwhelmingly negative.  Survey results show that some 60% of the respondents are opposed to the means-testing option. The proposed means test has been branded as a ¡§disrespect for the elderly¡¨.   The mere reference to financial sustainability has been dismissed as ¡§arrogant¡¨ and ¡§insensitive¡¨. Rational policy debates have been eclipsed by emotions.  Even among the minority who are in favour of means testing, they are divided on how it should be implemented.

     Meanwhile, the financial tsunami has hit us hard.  Within the past few days, a long-established electrical appliance retail chain here, and the Mainland operations of two big Hong Kong enterprises have collapsed.  Pressure on SMEs is mounting.  The disputes arising from the liquidation of Lehman Brothers have yet to be resolved.  And we have just seen a major listed company in Hong Kong run into major problems.

     It is disheartening to see bad news upon bad news.  During this trying period, Hong Kong should stand united and focus its energies on economic issues.  To add to the worries of our senior citizens is the last thing I want.

     Having assessed the latest situation, I have decided to shelve the idea for a means test for OAA, though I remain convinced that the proposal does not necessarily go against the principle of respecting the elderly.

     In due course, I hope that our society will embark on a serious review of the sustainability of the OAA policy in the context of our ageing population.

     I am also prepared to raise the Old Age Allowance to $1,000 a month for both of those aged between 65 and 70 who have gone through means testing and above 70 under the existing system. This is to show the Government¡¦s respect for public opinion. We will ask the Legco Finance Committee for approval as soon as possible.

     We will also review whether the permissible limit of absence from Hong Kong under the OAA Scheme can be relaxed.

     The challenges ahead of us are daunting.  Unity of purpose is what we need to weather this storm.  In the interest of the community, I believe, it is only right to defer the debate on the OAA policy.
     Thank you.

Reporter: (inaudible) ¡K a factor in your decision this time?

Chief Executive: The reason why I believe we should shelve this proposal for the time being is the overwhelming negative comments on the proposal from the elderly and the people at large. Particularly I think there is a lot of misunderstanding. They believe this is not the time to engage in serious discussions of this kind and I have come to the same conclusion. If I continue this debate the community will become even more divisive and we will not be able to focus all our energies and attention on solving the more important problem at hand, which is the financial tsunami which is affecting us.

     As I said, that particular problem is getting more complex and widespread and there are eruptions almost on a daily basis over the last few days. This is a time for unity and it is not a time for debate and I have accepted that. A shelving decision is premised on that consideration.

(Please also refer to the Chinese portion of the transcript.)

Ends/Friday, October 24, 2008
Issued at HKT 17:29


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