Budget ideas that aren’t handouts: targeted retirement protection — what about the HKMA as trustee?

It’s budget-consultation season again. Financial Secretary John Tsang says he dislikes the word “handout” as insulting, wants targeted help for those in need, prudent finances and long-term vision. So here are proposals that aren’t handouts — they’re long-term investments in retirement protection.

Why no more blanket handouts?

Because three years of giveaways have been far more blanket than targeted. Under “returning wealth” or “relieving hardship”, the chief executive’s three-year giveaway spree handed rates waivers and electricity subsidies to the richest households just like grassroots ones — aren’t those handouts too? Truly targeted help would redirect resources to the needy grassroots and elderly.

Any concrete retirement-protection ideas?

One bold proposal: make the HKMA an MPF trustee — zero management fees plus a fixed return. MPF’s most-criticised flaw is trustees charging among the world’s highest provident-fund management fees, averaging 2%. The government’s fix — employee choice of trustees via market competition — remains unimplemented. A faster, more effective route: require the HKMA to serve as a trustee, managing employees’ chosen MPF contributions fee-free with a guaranteed fixed return.

What else for the elderly?

Help the middle class care for elderly at home, and get healthy retirees volunteering. Ideas include a higher extra tax allowance for taxpayers living with elderly aged 70+, and expanded transport and leisure concessions encouraging healthy retirees to volunteer — including caring for frailer peers. Ageing won’t be solved with token sweeteners; it needs long-term vision.

To see why MPF fees are so high, compare Fund Expense Ratios at MPF fund comparison.