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Apart from this, we also find the substance of the amendment unacceptable, mainly because of the significant financial implications inveed, especially in the case of payments under the Old Age Allowance Scheme As at December 1994, approximately 420,000 persons were receiving this allowance The 133,000 between the ages of 65 and 69 receiving the normal allowance in 1994/95 were paid $485 per month subject only to a declaration that their income and assets were below a certain level. Approximately 287.000 aged 70 years and over were paid the higher allowance of $550 per month and were not even subject to an income declaration. We estimate that 73% of eligible persons in Hong Kong at 65 years of age or above claimed the allowance in 1994/95.
The allowance is not granted in recognition of any assessed financial need; that is why it has remained relativei, modest. But because of the large numbers receiving it, it is costly to fund. The full year cost for 1994/95, even at these levels, will be nearly $2.5 billion. This is more than the $2.2 billion which we shall have spent in that year on CSSA payments for those over 60 years of age who are in need and thus receiving CSSA.
We must be careful not to confuse welfare payments and retirement protection. I believe there is a widely held view that welfare support for elderly persons in need should be increased. But I do not believe that there is wide support for the taxpayer to contribute more to the elderly regardless of the financial or other needs of the elderly persons concerned.
:
To provide retirement protection for all over the age of 65 by raising Old Age Allowances e.g. to the $2.300 per month level would place at intolerable burden on the taxpayer. Assuming that the take-up rate of the allowance. if significantly increased as proposed, would rise to 85%. it would require nearly $10 billion of additional recurrent expenditure in 995/96 alone I et me just repeat, ver $10 billion of recurrent expenditure And we estimate that this would rise to $156 billion of recurrent expenditure in 1999/2000. The additional expenditure involved over this five year period would be as much as $55 billion This enormous burden would not result in funds being channelled to the needy but rather, indiscriminately, to all at or above 65 years of age whether rich or poor We do not believe that the community would support such a move Those who will benefit from retirement protection should, together with their employers. de obliged to contribute if they can afford to do so. This reduces or eliminates the burden on the general taxpayer. This is a vitally important consideration when we have an ageing population in which the number of elderly beneficiaries per salaries taxpayer is expected to continue to grow