Spread too thinly, old age allowance cannot reach HK elderly in need

Alleviation of poverty among the elderly ranks highly on the government's agenda. To implement his election manifesto, the chief executive has announced a plan to introduce a new old-age living allowance of HK$2,200 per month for elderly people in need.

Since then, there has been some misunderstanding about the objective of this new allowance, with the debate centring around why those aged 70 and above have to declare their financial means to receive the allowance. The argument goes that because those aged 70 or above already receive an old-age allowance (commonly referred to as "fruit money") without a means test, they should not have to satisfy a means test to receive the new allowance.

What this argument glosses over is the fact that this is a new type of allowance, and its objective is entirely different from that of the "fruit money". The new allowance also comes with new demands on financial resources.

It is not and cannot be an open-ended, blank-cheque extension of the current "fruit money" because it is simply not the same thing - it is a new allowance to alleviate elderly poverty. There are always limits on government spending plans.

If we take an open-ended approach with the new allowance, as suggested, this will inevitably affect other areas of spending that are also important to society such as health care, social and welfare services, aged care, education and security. We thus need to adopt prudent fiscal management and balance these competing needs.

The argument against a means test neglects the fact that, while there are people with genuine needs who could really do with an extra HK$1,100 or so each month - as is proposed under the new plan - there are also those aged 70 and above who really do not need it. If I have HK$1,000 to split between 10 people, how can I do the most good with that money? Do I split it evenly among all 10 people, or do I give it to those who need it most?