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Analysis of poverty situation in Hong Kong in 2016 announced
     The Chief Secretary for Administration and Chairperson of the Commission on Poverty (CoP), Mr Matthew Cheung Kin-chung, held a press conference this afternoon (November 17) to announce the analysis of the poverty situation in Hong Kong in 2016. Joining him were the Secretary for Labour and Welfare, Dr Law Chi-kwong; the Deputy Commissioner for Census and Statistics, Ms Marion Chan; and the Principal Economist from the Economic Analysis and Business Facilitation Unit, Ms Reddy Ng.
     This is the fifth annual update of the poverty line and the poverty situation analysis by the CoP since the official poverty line was announced for the first time in 2013. This helps the Government keep track of the poverty situation, assess policy effectiveness and guide policy formulation.

     In 2016, on the back of moderate economic growth and a stable labour market, there was an across-the-board rise in the poverty line thresholds alongside the increase in household income. Compared with 2015, the pre-intervention poverty figures in 2016 rose slightly, with a poor population of 1 352 500 persons and a poverty rate of 19.9 per cent. After recurrent cash policy intervention, the poverty rate in 2016 recorded a slight increase of 0.4 percentage point to 14.7 per cent.  The size of the poor population also went slightly upwards by 24 400 persons to 995 800 persons, staying below 1 million persons for the fourth consecutive year. The poverty situation by and large remained stable.

     Mr Cheung pointed out that the poverty statistics reflected the outcome of various factors at play, including the implementation of the Government's poverty alleviation initiatives, the number of beneficiaries involved, the economic situation, the change in overall employment income, and demographic changes, some of which were beyond the Government's control. For instance, the persistent ageing trend imposed an upward pressure on the overall poverty figures. In 2016, the proportion of elderly persons in domestic households increased by 0.6 percentage point (45 600 persons) to 15.7 per cent as compared with 2015. Most elderly persons are retired with no stable income, and will be defined as poor as the poverty line measures household income only without considering assets. The poverty rate of elderly persons aged 65 and above had a poverty rate of over 30 per cent, much higher than that of other age groups. Thus, the slight increase in the overall poverty figures in 2016 did not mean that the Government's poverty alleviation work was less effective. In fact, the Government's recurrent expenditure on social welfare has increased from 42.8 billion to 73.3 billion in the past five years, representing a substantial growth of 71 per cent. This demonstrates the Government’s steadfast commitment in poverty alleviation.

     On the effectiveness of policy intervention, the Government's recurrent cash measures in 2016 continued to provide effective support to poor households, lifting 356 600 persons out of poverty and reducing the poverty rate by 5.2 percentage points. Among the measures, the means-tested Comprehensive Social Security Assistance (CSSA) and the Old Age Living Allowance (OALA) had a more notable impact on poverty alleviation, respectively reducing the poverty rate by 2.8 percentage points and 1.5 percentage points. Moreover, the non-recurrent cash measures in 2016 further reduced the post-intervention poverty rate to 13.7 per cent. Taking into account the in-kind benefits, which comprised mainly public rental housing, an additional 287 300 persons were lifted out of poverty, and the post-intervention poverty rate was reduced to 10.4 per cent. This indicates the important role of public rental housing in poverty alleviation.
     The poverty situation analysis also shows that employment is still the best way out of poverty. Given the moderate economic growth and the stable labour market in 2016 as well as the implementation of the Low-income Working Family Allowance (LIFA) in May 2016, the poor population in working households continued to drop and the post-intervention poverty rate fell to a record-low level of 8.0 per cent, far lower than the overall poverty rate of 14.7 per cent. On the other hand, the CSSA caseload also reflected the correlation between the economic situation and improvement in the employment situation. As at the end of September, there had been a continuous decline in CSSA unemployment and low-earnings cases for about 100 months since 2009, with the respective numbers down to 13 415 and 4 641 cases, representing cumulative decreases of 60.9 per cent and 71.6 per cent. The CSSA unemployment caseload, in particular, was the lowest since Hong Kong's return to the motherland. This shows that most people will choose to improve their living through employment when abundant job opportunities are available in an economic boom and that self-reliance remains a core value of Hong Kong. The Government will continue to promote economic development to provide more quality employment opportunities for people and encourage them to improve their living through employment.
     As for the LIFA Scheme implemented since May 2016, its impact on poverty alleviation was reflected for the first time in the poverty situation analysis. In 2016, the LIFA Scheme lifted 5 600 non-CSSA working households with a total of 22 900 persons out of poverty, reducing the overall poverty rate by 0.3 percentage point. Amongst the members in those households being lifted out of poverty by the LIFA Scheme, there were 9 500 children. This drove the poverty rate of children aged below 18 (post-intervention) to a record-low level of 17.2 per cent, down by 0.8 percentage point as compared with 2015. These figures showed that the LIFA Scheme was conducive to lifting working households out of poverty and provided support to their children, in line with the Scheme's policy objectives of encouraging grass-roots families to stay in employment and alleviating inter-generational poverty. A number of improvement measures on the LIFA Scheme were announced in The Chief Executive's 2017 Policy Address to strengthen its functions in alleviating and preventing poverty. The Scheme will also be renamed as the Working Family Allowance Scheme. The relevant improvement measures are expected to be implemented on April 1, 2018.
     Looking ahead to the future poverty situation in Hong Kong, various measures to strengthen the poverty alleviation efforts and the support for the elderly, including the enhancement of the OALA (relaxation of the asset limit for the existing allowance and implementation of the Higher OALA), the improvement of the LIFA Scheme, and the Life Annuity Scheme to be launched by the Hong Kong Mortgage Corporation Limited, will have positive impacts on the future poverty figures. Their effectiveness in poverty alleviation will be reflected in the subsequent poverty situation analyses. Nevertheless, in view of rapid population ageing under which the number of retired elderly persons will continue to increase, coupled with the fact that the poverty line only takes into account income but not assets, there would be little room for significant improvement in the poverty figures.

     The "Hong Kong Poverty Situation Report 2016" and the presentation slides on the analysis of the poverty situation in 2016 have been uploaded to the CoP's dedicated website (www.povertyrelief.gov.hk).
Ends/Friday, November 17, 2017
Issued at HKT 16:33
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