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Written by: Chen Qianting
2020-06-21 12:28
Last update date: 2020-06-21 12:28The unemployment rate in Hong Kong from March to May this year was 5.9%, a record high of more than 15 years. There are voices in the community urging the government to set up a temporary unemployment assistance fund to help people survive the crisis.
The Secretary for Labour and Welfare, Luo Zhiguang, pointed out today (21st) that the current mechanism allows families in need to apply for unemployment CSSA and receive short-term cash support. As for whether temporary unemployment assistance should be set up, he pointed out that Hong Kong experienced 1997 in Asia. During the financial turmoil, the 2003 SARS, or the 2008 financial tsunami, the unemployment rate continued to be high. For example, after the SARS, the unemployment rate fell from 8.5% to less than 4% in 2007, reflecting that if the establishment does not require economic review The nature of unemployment assistance may not be "temporary." He estimated that the annual expenditure of unemployment assistance can be as high as 7.8 billion yuan to 14 billion yuan, or the Hong Kong government budget deficit in the next few years.
▼Details of applying for 10,000 yuan ▼
The unemployment rate in Hong Kong has reached a new high in more than 15 years in recent months. Some political parties have urged the government to set up a temporary unemployment assistance fund with a time limit of three to six months. The recommended amount ranges from $5,000 to $9,000, without the need for economic review. "Wage earners" get through the difficulties.
Unemployment CSSA has the same nature as "temporary" unemployment assistance
The Director of the Labour and Welfare Bureau, Luo Zhiguang, wrote a blog explaining the reasons why the Hong Kong Government refused to set up temporary unemployment assistance. He first pointed out that the existing unemployment assistance system in Hong Kong has always existed. Families in need can apply for unemployment CSSA and receive short-term cash support. The data shows that the increase in unemployment rate in recent months is basically the same as the increase in the number of cases applying for unemployment CSSA. Unanimously, the nature of unemployed CSSA has become "temporary".
As you can see from the chart above, the fluctuations in unemployment CSSA and unemployment rates are roughly synchronized. (Photo of the blog of the Director of the Labor and Welfare Bureau)
After 97 financial turmoil, SARS and 08 financial tsunami, it takes 20 years for unemployment rate to fall to 3%
Luo Zhiguang described that if a temporary unemployment assistance metal "bedded house" is added to the existing mechanism, the unemployment rate often fails to fall within a short period of time after the economy was hit. For example, in the Asian financial turmoil in 1997, the unemployment rate in Hong Kong 2.1% continued to climb to 6.4% in 1999, hovered between 4.4% and 6.3% in 2001 without falling, and rose to as high as 7.5% the following year.
In 2003, when the SARS attacked, the unemployment rate peaked at 8.5%, and it fell to 4% between 4 years and 2007; then the 2008 financial tsunami rebounded again, and the unemployment rate in Hong Kong was only repeated until 2017. It finally fell back to 3%, reflecting the employment of all people.
If the aid is not temporary, the annual expenditure is expected to exceed 10 billion
Luo Zhiguang said that if it is too optimistic to think that the assistance can be "temporary", it is necessary to discuss whether there should be an unemployment assistance that does not require contributions or economic review. Luo Xu pointed out that without contributions, there is no cost cost, and moral hazard will be higher. For employers, there is no need to pay for dismissal of employees, and it will even affect household and personal consumption and savings behavior.
In consideration of the use of public funds, if the number of unemployed persons is maintained at about 200,000, 130,000 of them are eligible to receive unemployment assistance without contribution or economic review, which is calculated based on the externally recommended amount of $5,000 to $9,000, which is the annual expenditure of the Hong Kong government It is about 7.8 billion to 14 billion yuan, accounting for 13% to 23% of the government's annual income tax. It can be seen that the government may have a deficit budget in the next few years.
Luo Xu pointed out that there is no unemployment assistance fund in the world that does not require contributions and no economic review. He asked why there are many political parties and pressure groups in Hong Kong to make relevant suggestions; he also said that if you want to set up unemployment assistance, you must also consider the MPF The problem of "hedging" with severance payment or long service payment.
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