By: Charlie Chan
See original post here.
I strongly agree with your editorial “Abolish MPF raids by bosses immediately” (May 7), but I would go further and totally abolish the Mandatory Provident Fund. It is not fit for purpose as a retirement fund, and it has failed on multiple levels from the perspective of ordinary citizens.
The MPF’s problems are symptomatic of what is wrong with the government’s mentality. It is a self-contributory retirement fund for Hong Kong’s working population, but when the administration planned and implemented this scheme, the individual workers and future retirees seemed to be their last consideration.
“Common prosperity”, which is now a key policy for President Xi Jinping, was obviously far from our officials’ minds.
The priority seemed to be that government officials should have no responsibility, so a statutory authority was set up to work independently with the private sector to establish a “privately managed” retirement scheme; that private financial service providers should boost Hong Kong’s financial services industry; and that employers should be compensated for the perceived inconvenience.
Splitting the contribution into two – 5 per cent from the employer and 5 per cent from the employee – was a large red herring. The employer’s contribution was never an additional payment borne by the employer, but rather an extraction that was built into the compensation package. It is a fallacy that the MPF had a financial impact on employers apart from minor administrative costs.
Pre-existing long service and severance payments were separate, legally binding agreements with the employee. It is bizarre and unconscionable that the government allowed these to be deducted from the worker’s MPF, and it is now completely astonishing they are planning to use billions in taxpayer dollars to subsidise the phasing out of this inappropriate offsetting mechanism. This illustrates how deeply vested interests have been rooted in our government’s decisions.
It must be hoped that our next chief executive, John Lee Ka-chiu, as a former police officer, will be able to see through all the smoke and mirrors. May I suggest that he replace the MPF with universal basic income (UBI), a periodic cash payment unconditionally delivered without means testing or work requirements. This proposal will doubtless be anathema to the vested interests who have benefited from Hong Kong’s laissez-faire policies, but these policies have perpetuated an unfair use of resources that has led to general poverty.
The government’s recent cash payout schemes illustrate the positive effect that such UBI payments have on the local economy, especially small businesses. Contrary to the stance of previous administrations, Lee’s “new chapter” should recognize that welfare is for people, not businesses.