Lam convinced Leung to shelve plan to scrap MPF 'offsetting' mechanism: source

Chief Secretary Carrie Lam Cheng Yuet-ngor persuaded her boss to ditch a plan to abolish the mechanism allowing employers to offset severance pay against their contributions to employees' Mandatory Provident Fund accounts, according to a person familiar with the issue.

She urged Chief Executive Leung Chun-ying to remove the proposal from his policy address, saying it would be "impracticable" because of the political pressure from big companies it would generate, the person said.

There had been widespread speculation that the move would be in the address, delivered last week, but Leung later said that had been a misunderstanding.

The source said Leung had wanted to abolish the offsetting mechanism but "Lam had a discussion with him … eventually the part was taken out from the final version of the address".

The apparent disagreement between the top duo once again pointed to tension at the highest levels of the government, highlighted last week by a public warning from finance minister John Tsang Chun-wah that Hong Kong could run out of money if its lavish spending continued. Tsang was speaking after Leung announced measures that would add HK$100 billion a year to recurrent expenditure.

No comment could be obtained from the Chief Executive's Office last night but a government source confirmed Lam had met Leung to discuss the issue before his policy address.