Budget must fight inflation

The government reported on Monday the inflation rate remained at 3.7 percent in December, with food prices 4.3 percent and rents 5.1 percent higher than a year ago. As the US, the EU and Japan have all resorted to quantitative easing to stimulate their economies, the whole world is once again awash with inflation brought by excess liquidity.

Hong Kong is no exception and the leading inflationary factors are food and rent, putting greater pressure on grassroots households directly. As such, the new budget scheduled to come down late next month should include measures to ease the pressure of inflation on low-income residents.

Almost all public utilities and messenger transport service operators have raised prices or fares or applied for permission to do so in recent months. These moves inevitably inspired prices and fee hikes in other sectors while rents and food prices continue to surge in front of the pack. The growing financial pressure fed by inflation is making life in grassroots communities even more difficult because the inflation rate is higher than wage increases.

The latest round of quantitative easing in the US resulted in an influx of hot money into Hong Kong while similar policies in the EU member states and Japan are adding or will add to excess liquidity around the world to push inflation ever higher. Meanwhile, the appreciation of the yuan against the US dollar and some other major currencies has led to price hikes of staple foods from the mainland.

Rising inflation affects the daily lives of low-income residents the most and these people need financial assistance from the government. Authorities must keep a steady eye on such households and draw up relief plans before major damage is done, by helping ease the pressure of inflation on grassroots residents and ensuring their basic needs in life are met.

The 2013-14 Fiscal Budget, to be announced by the end of February, should contain measures aimed at helping the needy tide over the most difficult time, including living allowance, raising transport allowance and subsidies for their housing expenditure.

This is an excerpted translation of a Wen Wei Po editorial published on Jan 22.

Kwan Chiu

Health insurance needed

Since CE Leung delivered his first Policy Address (PA), the press and members of the public have focused mainly on issues such as land and housing supply, but there are other quality of life issues that should not be ignored, including medical care, welfare and education.

Regarding medical care, Secretary for Food and Health Dr Ko Wing-man explained to the Legislative Council Subcommittee on Health on Monday that the government has made it clear, Hong Kong's medical care system runs on a double-track platform of both private and public services. Public healthcare is the foundation of a safety net for public health, while private hospitals and clinics serve those who can afford to pay on their own or who have health insurance.

Without a doubt the double-track format would be the most ideal and sustainable medical care system if it worked in perfect balance, but the reality is that the double-track platform has been in place for many years but never has achieved balance. In fact, the healthcare system is becoming increasingly dependent on public hospitals to care for the great majority of local residents, bearing over 90 percent of the workload.

The double-track healthcare system is nothing new. And the government, the healthcare industry as well as local residents know very well it will collapse when public hospitals buckle under the growing workload, only because their service is so much more affordable than private hospitals.

The simple truth is that money is key to putting the double-track platform into balance. Currently service charges are the most "critical" factor in keeping the healthcare system off balance and hardest to correct, compared to issues such as service quality and availability, equipment and facilities.

For example, the same surgical procedure to restore normal circulation in one's heart can cost HK$200,000 or more in a private hospital; whereas public hospitals charge only a few hundred dollars. What additional facts are needed to explain why public hospitals will die of exhaustion if their services remain so much "cheaper" than private clinics?

Therefore, the most pressing task for the government is to implement a health insurance scheme as soon as possible in order to assist local residents to buy medical insurance that will help keep the double-track medical care system in reasonable balance.

The author is a veteran current affairs commentator. This is an excerpted translation of her column published in Ta Kung Pao on Jan 22.

(HK Edition 01/23/2013 page3)