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Speech by SLW at pre-conference workshop of "2010 Joint World Conference on Social Work and Social Development: The Agenda" (English only)

     Following is the welcoming speech by the Secretary for Labour and Welfare, Mr Matthew Cheung Kin-chung, at the pre-conference workshop of the "2010 Joint World Conference on Social Work and Social Development: The Agenda" today (June 10):

Distinguished guests, ladies and gentlemen,

     Good morning. It gives me great pleasure to address this pre-conference workshop. Let me first extend a very warm welcome to all distinguished overseas delegates. I consider it a rare honour and privilege for Hong Kong to host this first-ever Joint World Conference on Social Work and Social Development.

     The United Nations Social Protection Floor Initiative promotes universal access to essential transfers and provision of basic services for the population to enjoy a set of social guarantees that helps them deal with life's risks.

     This seminar will take a collaborative cross-sectoral approach typical of the evolution of global dialogue on social protection floor, with experts in the field sharing practical experiences faced by developing and developed societies alike.

     Allow me to share with you in the next 10 minutes or so how the Hong Kong Special Administrative Region Government positions itself and goes about the important and mammoth task of social protection.

Hong Kong's Social Protection Strategy at a Glance

     First and foremost, our long-term strategy for social protection is to develop the economy, create employment opportunities, invest in education and provide a viable social security system. Expenditure on education alone now takes up 23% of our government's recurrent expenditure - the largest share among all policy areas. This underlines our belief that education and training are fundamental to enhancing social mobility and combating poverty. After all, quality human capital is the key to building a knowledge-based economy in a closely connected and increasingly globalised environment.

     It follows that social security and direct welfare services are not Hong Kong's only instruments of social protection.  Apart from a sturdy social security safety net for the needy and disadvantaged, our 12-year free education, heavily subsidised healthcare system and major public housing programme (which accommodates 30% of our population in low-rent public housing and another 18% in subsidised home ownership flats) combine to provide essential social and economic cushions for our population of seven million.

     We are committed to assisting the needy through the provision of preventive, supportive and remedial welfare services. Taking social security payments and welfare services together, expenditure on social welfare accounts for a substantial 17.3% or US$5.1 billion (HK$40 billion) of the Government's annual recurrent expenditure - second only to education.

Social Security System

     Let me elaborate on our social security system.

     We have in place the Comprehensive Social Security Assistance Scheme for those who cannot support themselves financially owing to old age, disability, illness, unemployment and low earnings as well as the Social Security Allowance Scheme which provides largely non-means tested grants to elders and persons with severe disabilities.  Both schemes operate on an entirely non-contributory and government-funded basis, currently benefitting some 1.1 million people.  Given that Hong Kong has one of the lowest and simplest tax regimes in the developed world, this shows the importance and priority that we accord to ensuring that our needy citizens can meet their basic or special needs.  It also brings out the significance of maintaining the sustainability, viability and integrity of our social safety net as our population grows and ages over the next 30 years.

Enhancing Social Protection: The Hong Kong Story
Statutory Minimum Wage

     Social protection goes well beyond cash handouts for the less privileged.  It must also be an investment in inclusive growth, and for those capable of standing on their own feet, a stepping stone towards self-reliance. It is an investment in human capital to get people out of exclusion and poverty and build resilience to risks and vulnerabilities.

     As the policy secretary responsible for both the labour and welfare portfolios, let me outline our latest policy initiatives to enhance the well-being of our grassroots workers, thereby further reinforcing our social protection floor.

     Despite our basic philosophy and strong belief in minimum interference in the market, the Government has decided, rather bravely, to put in place a statutory minimum wage across the board in Hong Kong. A Government bill to this effect is being closely scrutinised by our legislature. This momentous policy decision marks a significant breakthrough in protecting the well-being of our workforce at the grassroots level.  Our aim is to devise an optimal statutory minimum wage regime which provides an hourly wage floor to forestall excessively low wages, offer wage protection for elementary workers and promote social harmony without, at the same time, unduly affecting our labour market flexibility, economic growth and competitiveness as well as causing significant job loss at the low end.  This will be a fine balancing act.

Tough Measure to Deter Defaults of Labour Tribunal Awards

     Apart from breaking new ground in increasing labour protection, we also leave no stone unturned in safeguarding the statutory rights of our workers. We will implement shortly a tough new measure to deter defaults of wage awards made by the Labour Tribunal.  Under the newly enacted law which criminalises the wilful non-payment of Labour Tribunal awards, an employer on conviction will face a maximum jail term of three years and fine of some US$45,000 (HK$350,000).  Let me stress that our Labour Department is making unrelenting efforts to crack down on any unscrupulous employers for wilful non-payment and under-payment of wages as well as failure to pay statutory benefits.  Our criminal courts are also taking a serious view of wage offences, with more convicted employers put behind bars. My experience over the years tells me that the best deterrent to wage offences lies in criminal sanctions.                  

Improvement in Employment Scene

     My belief is that employment is the key to people's livelihood and the bedrock of social harmony. For behind each worker depends a family with mouths to feed.  To me, every job counts and this is why the Hong Kong SAR Government pursues vigorously an Active Employment Policy.  In this respect, I am relieved to say that our labour market has withstood admirably well the impact of the global financial tsunami.  A year ago, our unemployment rate rose to a high level of 5.4%.  The Government responded with several rounds of substantial relief measures amounting to US$11.2 billion (HK$87.6 billion) - equivalent to 5.2% of our Gross Domestic Product, higher than the average for the G-20 economies. Our aim was to "stabilise the financial system, support enterprises and preserve employment". We launched a loan guarantee scheme which helped over 10,000 small and medium sized enterprises to ride out the storm. In the end, we preserved over 240,000 jobs. With the local economy gradually coming out of the woods, our latest unemployment rate is now down to 4.4%.  However, there is no room for complacence as the external environment is still fraught with uncertainties.

Poverty-Alleviation Measures: Enhancing Capability and Connection

     As a small and open economy, Hong Kong is subject to external factors and our economic structure is tilted heavily towards the service industry.  As our workforce comprises employees with different skill levels, it is inevitable that the income disparity among individuals is wide. Such a phenomenon is commonly observed in other knowledge-based and fast developing economies. We are acutely aware of the wealth gap in Hong Kong and are doing everything within our power to alleviate poverty. We will continue to promote our overall economic growth and equip our people with the means to move up the social ladder through education and training/retraining.  To this end, we adopt a pragmatic and multi-pronged approach, mobilising not only government resources but also the private sector, business community and non-government organisations (NGOs).

     Let me cite a few measures to illustrate how we tackle cross-generation poverty and assist the working poor.   

     First, we set up the US$38.5 million Child Development Fund (HK$300 million) in April 2008 to promote the longer-term development of children from a disadvantaged background. Projects under the Fund have three core components, namely, a personal development plan for the participant, a mentorship programme and targeted savings, by which we help under-privileged children build up financial assets and social networks with a view to reducing inter-generation poverty. We aim to benefit some 13,600 children through the pilot project.

     We have also introduced the Transport Support Scheme to provide transport subsidy over a period of time for low-income employees and needy job-seekers living in four remote districts in the New Territories.  The Government realises that transport expenses constitute a burden on the "working poor" in Hong Kong.  We are looking into this issue in a serious, comprehensive and in-depth manner with a view to mapping out concrete proposals by the end of this year to assist low-income employees.

     Apart from macro-strategies of enhancing the capability of the needy, we do not lose sight of community enhancement measures on a micro and district level.  This is in keeping with our "district-oriented approach" in strengthening support for at-risk communities.  

     While the Hong Kong SAR Government remains a major funding source of various welfare initiatives, we acknowledge that services and initiatives can only achieve the biggest social impact if we can tap the wisdom and resources of various sectors in society through sustainable collaboration.  For this reason, we have been actively promoting tripartite partnership among the Government, the business sector and NGOs through a multiplicity of projects. A case in point is the Partnership Fund for the Disadvantaged.  Since its inception in 2005, the Fund, through funding support on a matching basis, promotes collaboration among the social welfare sector, the business community and the Government in helping the disadvantaged, thereby enhancing social cohesion. So far, around US$16.7 million (HK$130 million) has been approved under the Fund, attracting a total donation of a similar amount from over 560 business corporations to support over 300 welfare projects.  The total number of beneficiaries has already exceeded 650,000.  To keep up the momentum, we have just injected an additional US$25.6 million (HK$200 million) into the Fund.

     In the face of a fast changing socio-economic landscape, we need to go beyond the provision of traditional social welfare services to address community needs.  Indeed, social welfare nowadays means far more than basic relief work.  It should be viewed as social capital, social investment and social development.  It is against this background that we established in 2001 the Community Investment and Inclusion Fund (CIIF) as a new policy initiative. The US$38.5 million (HK$300 million) Fund seeks to promote the development of social capital in Hong Kong. More specifically, it provides seed money to create social capital by fostering mutual support and assistance among people, developing cross-strata neighbourhood networks, and promoting community participation and cross-sector collaboration. So far, over 200 projects have been approved under the CIIF and some 530,000 people from different age groups, social strata and cultural or ethnic backgrounds have participated in the projects.

Long-term Welfare Planning

     Looking ahead, we need to brace ourselves for tougher times in view of rapid social and economic changes, both external and internal.  While our social welfare system is highly developed and institutionalised, we need to ensure its sustainability and flexibility to meet changing demands and circumstances.  A rapidly ageing population and the social problems arising from the increasing economic integration between Hong Kong and the Mainland are just two of the new challenges that we have to embrace.

     To this end, our Social Welfare Advisory Committee, a government advisory body chaired by a non-official chairman and comprising representatives from different sectors, is conducting a consultation exercise to seek views from the social welfare sector and relevant stakeholders on long-term social welfare planning in Hong Kong.  I am confident that this consultation will shed useful light and provide essential pointers on the way forward.


     Ladies and gentlemen, I have given a pen-picture of Hong Kong's work on the social protection front in global terms.  I hope that this will serve as an appetiser to the international intellectual banquet which will formally kick off this evening.

     Staging this prestigious international conference here is a vote of confidence in Hong Kong as a cosmopolitan, vibrant, open and caring city where the East meets the West.  I wish you all a successful conference, productive cross-fertilisation of ideas and experiences and an enjoyable and memorable stay in Hong Kong. Thank you.

Ends/Thursday, June 10, 2010
Issued at HKT 10:50


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