Public fury erupts over an unjust MPF

Financial Secretary John Tsang thought it would be easy: a $93.8 billion surplus, fiscal reserves topping $600 billion — the 2011-12 Budget practically wrote itself, and a few “sweets” would win applause. Instead the sweets sparked outrage. What citizens resented most was the plan to inject $6,000 into every MPF account instead of rebating taxpayers.

Why did the MPF injection anger people so much?

Because the money would be locked inside a system seen as unjust — far water that can’t put out a near fire. The MPF is attacked for high fees, poor returns and the offsetting mechanism that eats into workers’ retirement savings. To the public, $6,000 trapped in that system is worth far less than a tax rebate in hand.

What else was wrong with the Budget?

A fat surplus paired with relief that missed the mark — that was the root of the anger. With coffers overflowing, citizens expected the Budget to genuinely share wealth; instead the relief was seen as missing the point, leaving even the middle class feeling left out.

What’s the lesson?

Retirement policy can’t be made behind closed doors — public sentiment is the ultimate political reality. Until the MPF sheds its unjust image, any proposal to pump public money into it will be seen as pouring money into the sea.

To see how MPF fees eat into your returns, visit MPF fund comparison for expense ratios across schemes, or the MPF education centre to understand how the system works.