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Last Wednesday, the 5th Legislative Council held its first meeting, and I suppose it is doing some real deals at the moment. With the seats increased from 60 to 70, the competition during this year's election was quite intense. Now that it's all done, I believe everyone in Hong Kong is hoping for a brighter future. We hope this is a new start, with fresh councilors bringing new political environments, every one is determined to work wholeheartedly for the wellbeing of the citizens.

Actually, to examine whether the council is really serving the people, the proposal regarding Old Age Living Allowance (OALA) of HK$2,200 per month is the first touchstone.

For the first time, the new HKSAR government is introducing a measure to alleviate poverty. If the appropriate funds are approved by the Finance Committee, more than 400,000 elderly people will benefit from it, and compared to the current monthly allowance of HK$1,090, they will get more than double that amount.

This beneficial policy has always been welcomed by the public since it was first announced by Chief Executive Leung Chun-ying in mid-July this year. From the point of view of most people, this new policy caring for the weak members of society is regarded as a favorable step, appropriately arranged by the new government. The measure should be finalized and implemented as soon as possible, ensuring the vulnerable group get the money in time for a happy new year.

The road to this policy also faces setbacks, as have other good measures in the past. Recently, some councilors stated that they would cast dissenting votes, unless the limitation on income and assets is eliminated. In other words, the application of this appropriation might not have sufficient votes, thus disappointing 400,000 seniors.

Those who are against the Income and Asset Limits seem to have spoken for the elderly arguing that canceling the established limits will be good for all the senior citizens. Some others consider it a warm-up measure for Universal Retirement Protection.

But are they really considering the public? Every politician knows the claptrap of asking the government to give money to the public. They don't care about the consequences of spending public money as long as they gain politically; however, the government, responsible for managing public resources, could hardly do everything regardless of Hong Kong's financial capability.

Let's analyze whether canceling the Income and Asset Limits is reasonable. As taxpayers, we all want our tax dollars given to those really in need; we sometimes are willing to pay more to ensure the life of the weak; we want public money spent properly.

The allowance aims to support the poor by helping the elderly financially and easing their burdens. But this is not necessary for every senior since many are capable of supporting themselves.

According to the authorities, if the plan is carried out, it will help more than 400,000 relatively poor seniors, which means an extra HK$6.2 billion in public expenditure. See what happens if there are no limits - the amount would be HK$9.9 billion for all over-70s and HK$13.6 billion for over-65s. In other words, if the limitation is eliminated, HK$7.4 billion will be spent unnecessarily, causing a waste of public resources.

Moreover, the aging of the population is severe in Hong Kong. It is estimated that in 2031, the population of over-65s will increase from current 0.98 million to 2.16 million and to 2.56 million in 2041 accounting for 30 percent of the population.

At the same time, the labor force will decrease from 2020, indicating fewer taxpayers. If individual financial situations are not taken into consideration, it will inevitably bring long-term negative influences on Hong Kong's finance.

Therefore, it is necessary to set Income and Asset Limits, which not only ensure that the government focuses on those with the greatest needs, but also saves public money for other constantly changing demands. This is a policy for alleviating poverty, and if some councilors are determined to put a spoke in the government's wheel and obstruct the appropriation, they are actually acting against the 400,000 eligible elderly people.

The author is vice-president of the Chinese Manufacturers' Association of Hong Kong.

(HK Edition 10/18/2012 page3)