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Lottery fund "Gantang", the government produces evil results

2020-10-19T22:42:50.421Z


The Secretary for Labour and Welfare Law Chi-kwong published a blog on Sunday (18th), mentioning the suspension of the Mark Six lottery under the new crown pneumonia epidemic and the uncertainty of fund investment returns, which accelerated the depletion of lottery funds that support social welfare services. New coronary lung


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Written by: Commentary Editing Room

2020-10-20 06:30

Last update date: 2020-10-20 06:30

The Secretary for Labour and Welfare Law Chi-kwong published a blog on Sunday (18th), mentioning the suspension of the Mark Six lottery under the new crown pneumonia epidemic and the uncertainty of fund investment returns, which accelerated the depletion of lottery funds that support social welfare services.

The impact of the new crown pneumonia on the lottery fund is still short-term, and there is no shortage of emergency measures. Don't worry about it. However, the Secretary said that the current situation of the lottery fund raises doubts that the allocation of the lottery fund is improper and can be improved.

The Lottery Fund is one of the nine government financial funds. Its purpose is to support and develop social welfare services in Hong Kong. The income source is 15% of the income from the Mark Six lottery, customized license plate numbering scheme, donations and investment income from the fund.

In 2019/20, the Lotteries Fund allocated a total of 5.74 billion yuan to finance capital engineering projects, renovation, furniture and equipment, and pilot projects. 582 projects were involved.

(Image source: Social Welfare Department)

The lottery fund was criticized as a small treasury around 2010. It was "flooded" for a long time, and the donations of Hong Kong people could not be used well.

In line with the 10 billion yuan "Special Plan for the Implementation of Private Land for Welfare Uses" granted by the government in 2013/14, the increase in fund expenditure has gradually been noticeable since 2016. However, as the Mark Six lottery and investment income have both increased, there is no financial problem.

This year's new crown pneumonia epidemic has reduced the revenue of the lottery fund and greatly increased the expenditure. In the 2020/21 budget, assuming that the revenue of the Mark Six lottery is two-thirds less than expected, it will be close to one billion yuan.

In terms of expenditure, about 3.5 billion yuan was spent on social welfare services, and 1.1 billion yuan was spent on the construction of quarantine facilities. The two totaled 4.64 billion yuan.

Once consumption and growth occurred, the deficit increased sharply to 2.39 billion yuan, and the balance returned to 21.3 billion yuan in 2013/14.

There is no shortage of ways to save the fund’s finances

Even if the single expenditure on quarantine facilities is excluded, the growth of social service facilities is indispensable.

Assuming that the expenditure of the lottery fund in the next few years will increase to 4 billion yuan per year, and the Mark Six lottery and investment income will be reduced to 1.8 billion yuan in the next few years, the annual operating deficit will be about 2.2 billion yuan. After deducting the 10.9 billion commitment, the reserve is about Enough for five years.

If the purpose of the appropriations and the eligibility of the fund application are not adjusted, the government can increase the revenue of the lottery fund, including after discussing with the Jockey Club, amending the law to increase the proportion of Mark Six lottery revenue allocated to the lottery fund from 15% to 20%, or reducing the number of horses The commission fee, for example, reduced from 6% to 3%, can increase several hundred million yuan each year, plus the government's single subsidy of this year's Mark Six lottery revenue, can delay the depletion time by two to three years.

Taking a closer look at the expenditure distribution of the Lottery Fund, the Social Welfare Department, Housing Department, and Architectural Services Department are actually "large households."

In the 2019/20 fiscal year alone, the three departments accounted for nearly half of the expenditure, reaching 2.28 billion yuan.

With the continued purchase and construction of social welfare facilities in the next few years, the status of the "big household" is expected to remain unchanged.

The question is, since it is a government department, why use the money from the fund?

The Mark Six lottery, which has been suspended for nearly 8 months, resumed the draw on September 24.

(Photo by Gao Zhongming)

Improving finances requires improving financing

Government policy bureaus or departments can apply for lottery fund subsidies to cover social welfare, but also expenses linked to building units, renovation works, and subsidies, as well as experimental or innovative projects.

However, since this is a project planned or supported by the government, why go through the lottery fund?

Even Chen Maobo raised this issue.

When he was a member of the Legislative Council, he once questioned the government on this issue, but he was replied that the arrangement "has been in use for a long time and is effective". "The arrangement is appropriate and will not have any impact on the provision of welfare services by non-governmental organizations."

Perhaps government departments need to provide technical or service evaluations for projects under the Lottery Fund, so they use the funds as well. However, it is more ideal to withdraw funds from within the department to avoid the burden of the Lottery Fund. Non-profit organizations can rest assured to apply for funding.

Of course, the above suggestions are just "passing the left and right." As a short-term way to relieve the fund's deficit, the government can't avoid paying more for social welfare expenditure.

Tracing back to the source, this is the consequence of Hong Kong's repeated failure to reform elderly retirement protection, medical care and social welfare financing. If Hong Kong implements the construction of elderly facilities ten years earlier, the government may avoid infrastructure inflation and complete the project with less expenditure; Hong Kong can reform the tax system, MPF, medical and retirement protection earlier, and the government does not have to bear almost all of its welfare expenses.

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Source: hk1

All news articles on 2020-10-19

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