Visitors to Hong Kong are bedazzled by our sparkling skyscrapers and shiny shopping malls, all full of fancy fashion brands. At chic restaurants, tai-tais lunch with their friends, draped in Dior and Hermes. Sit outside a bar in Central or Wan Chai and you won’t have to wait 15 minutes before a Ferrari or Lamborghini goes growling past.
Hong Kong is dripping with money. We have over 60 US-dollar billionaires, and only the devil knows how many more millionaires. The government is sitting on USD442 billion in reserves – the seventh-highest in the world.
Yet the latest statistics show that 21.4 percent of people here are living in poverty – a rise of one percentage point over last year. And that figure is almost certainly an underestimate – officials have been long criticized for seasoning the statistics to make them less unpalatable. The government has blamed the increase on the recent protests that shook the city. And it may well be right – businesses were hurt and tourist numbers plunged.
But that is not the point. Forget arguing about the causes of a one-point rise or fall – the number of poor here is simply a shameful disgrace.
Recent administrations may well have exacerbated the problem, but they are not to blame for its root causes. The institutionalized rich-poor divide has been going on for decades – it existed way before the handover in 1997.
The colonial administrations did little to tackle poverty – with the possible exception of 1970s governor Murray MacLehose. But the situation has not improved under SAR governments. To make the scale of the disparity clear: in 2016 the median monthly household income of the top 10 per cent of Hong Kongers was 44 times the bottom 10 per cent. The poorest would have to work three years and eight months on average to earn what the richest made in a month. And nothing has changed.
There’s an old adage that if you’re not a socialist at 18 you have no heart, and if you’re not a capitalist at 30 you have no brain. Well I’m certainly not getting all Marx or Maduro, but inequality in Hong Kong is obscene and has caused people pain for far too long. Government social allowances and the occasional cash hand-outs are just superficial sops – virtually no attempt has been made to get to the issues at the heart of the problem.
The government keeps saying it cannot spend too much on welfare because it needs to maintain “prudent fiscal policy” (i.e. keep all our money) in order to “prepare for a rainy day.”
Well the rainy day is already here. More than a fifth of the population now live in poverty. These people need help. A tenth of the population are aged over 70 but many cannot enjoy retirement – they are still forced to work. Grandmothers collect cardboard and cans for recycling to make ends meet. These people need help. The Mandatory Provident Fund, set up in the mid-90s, may be seen as a step in the right direction, but frankly, it’s a joke. In order to enjoy a happy retirement, workers need to put so much of their income into the fund they cannot enjoy their lives now.
Yet every administration has refused to create a meaningful welfare system, while at the same time saying they are improving the situation. In 2014 government officials – including the then-chief secretary Carrie Lam – patted themselves on the back for the “record low” number of citizens living in poverty. That “record low” was 1.3 million people.
Hong Kongers are famously hard-working and resilient. People do not complain if their luck is down. But that does not mean they or their hardships can be overlooked – especially in these difficult times.
So what can be done about this problem? How can we have a bright, shiny Hong Kong full of entrepreneurs and millionaires but without a fifth of the population living in poverty?
It’s unlikely that there is a single simple answer – a “magic bullet”. It is a complex problem that requires a serious rethink about how Hong Kong conducts itself. But one part of any solution must surely be a redistribution of wealth by having heavier – and enforced – taxes on the rich and super-rich.
As it stands, dividends from shares are not taxed here. And that is where most of the “high net worth” folk get their cash. A former banker friend of mine suggested taxing assets rather than income – but the rich would simply move their assets into offshore accounts.
Whichever way you look at it, the rich are too rich and the poor are too poor. It is unconscionable that billionaires can continue to make so much money from the city while so many of its citizens live in squalor.
Do we really want to live in such an unfair society?
(Alex Price is a journalist who has lived and worked in Hong Kong for over 30 years.)
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