Human Rights Friday – Intergenerational Justice and Labour: Right to Retirement Protection

29 Jan

Human Rights Friday – Intergenerational Justice and Labour: Right to Retirement Protection


29th January 2016

There has been growing concerns among the general public regarding retirement protection of the elderly. The HKSAR Government has launched a six-month public consultation about retirement protection scheme. According to official statistics, about 300,000 elderly people in Hong Kong are living under the poverty line. A number of scholars specializing in retirement protection urge the Government to propose a concrete scheme for these people.

Chief Secretary Carrie Lam has on several occasions repeatedly expressed that the Government has reservations for the “regardless of rich or poor” option. The Government believed that about half of the elderly living under poverty line does not have actual financial needs, and it would do injustice to the younger generation if taxes have to be increased to enforce a universal retirement scheme.

However, questions arose as to whether or not discussing retirement protection from the perspective of poverty alleviation is appropriate. Will a universal scheme cause intergenerational injustice? Is the right to retirement protection a privilege exclusively enjoyed by the poor, or a fundamental human right for everyone?

The joint-statement issued by the Universal Old Age Pension Scholar Proposal (“the Proposal”)suspected that the Government was trying to mislead the public by overemphasizing the wordings “regardless of rich or poor”. During this month’s Human Rights Friday event, one of the joint signatories Chris Chan King Chi, an associate professor of the Applied Social Sciences Department at City University of Hong Kong, pointed out that the public has directed public discussion away from the perspective of economic and social rights, but to the angle of poverty alleviation. Both Chris Chan and another joint-signatory Professor Raees Begum Baig believed that such discussion was the cause of the dichotomy between the two options – “regardless of rich or poor” and “those with financial needs”. It led to the formulation of Asset Test, which links the retirement protection scheme with the Comprehensive Social Security Assistance (CSSA).

There is no need to initiate another in-depth debate on the asset test for the scheme if the society looks at the issue from a human rights perspective. According to Article 8 of the International Covenant on Economic, Social, and Cultural Rights (ICESCR), people are entitled to right to social security, including social insurance. As such, retirement protection is a fundamental right that benefits everyone, not a form of welfare.

Many have expressed the concern that the Proposal is financially unfeasible. On the consultation flyers, the Government pointed out that the Proposal will aggravate the burden on government and increase taxes, which in turn will drag down the public finance system. Chris Chan argued that the Proposal will not increase personal profits tax because the tax rate in Hong Kong is relatively low as compared to other countries in the Asia-Pacific Region. It will, on the contrary, take half of the monthly contribution from the much-criticized Mandatory Provident Fund (MPF) Scheme as the fund for the Proposal, which amounts to 2.5% of employees’ monthly salary. The remaining 2.5% will continue as contribution to the MPF Scheme. As for profit tax for corporations, the universal scheme aims at encouraging social responsibility for high-profit corporations by levying an extra of 1.9% tax for those which earn an annual profit exceeding $100 billion. In fact, to keep the universal scheme running, Hong Kong government only need to allocate an extra $50 billion in the forthcoming year since it has already reserved $50 billion fund for retirement protection. The government is required only to contribute $100 billion as the seed fund.

Moreover, Chief Secretary commented in a RTHK programme that the universal scheme poses unjust burden on the young generation because it requires them to feed and clothe the elderly. In response to her comment, Prof. Chris Chan and Prof. Raees Baig argued that rather than calling for an increase in taxes from the young generation, the Proposal starts with the MPF Scheme and high profits corporations. It requires the government to reserve $50 billion as an injection into the fund. Besides, they believed that Chief’s Secretary’s comment is ill-founded because the young generation will ultimately benefit from the universal scheme. Prof. Chris Chan also pointed out that Chief Secretary has never responded to the Scholar Proposal, and that a dualistic discourse does not only do more harm than good to the general discussion, it also provokes intergenerational conflict.

Retirement protection is a fundamental economic right recognized by the international human rights conventions. The government has to take up its responsibility under the ICESCR, enforce a retirement protection scheme that benefits the people, and allow the elderly to live without facing troubles in the rear. The controversy over retirement protection is not a debate on poverty alleviation. Rather, it is about the protection of a fundamental human right.