Green Light Urged for Transport Subsidy

The Government's $4.8 billion proposal to roll out the Work Incentive Transport Subsidy (WITS) Scheme will be put to the Legislative Council's Finance Committee for approval today.

I earnestly appeal to legislators and the public to support the proposal for the sake of our many grass-root workers. We aim to launch the WITS Scheme as soon as possible to ease the travel expense burden on low-income earners.

The WITS proposal is a marked improvement over the existing experimental Transport Support Scheme (TSS) which is limited to four remote districts.

For one thing, the WITS Scheme is territory-wide. Also, its $600 monthly payments are not limited to 12 months but are continuous. And it covers not only employees but also the self-employed.

To achieve long-term success, our underlying principles in setting out the WITS proposal are that the scheme must be viable, sustainable and equitable.

Since we unveiled the WITS proposal in December 2010, we have listened carefully to many views from legislators, political parties and various stakeholders. We have already revised upwards the income thresholds for small-size households.

Continued discussions this past week clearly indicate strong calls for the Government to extend further the income threshold for 2-member households, so that it can benefit more households with both members working and receiving the statutory minimum wage. We thus propose to further raise the income threshold for 2-member households from $10,000 to $12,000. This is equivalent to about 84% of the median income for households of the same size. The income threshold for 3-member households is $13,000 a month.

To support the transportation costs of part-time workers, such as housewives working as hourly-rate domestic helpers, we propose extending the scheme to those who work less than 72 hours but at least 36 hours per month. These eligible persons will receive $300 per month.

These two significant further enhancements will bring the total number of potential eligible employees to 436,000, an increase of more than 100,000 people over the original proposal announced last December. The Government's financial commitment over three years would also increase to around $4.8 billion, over $1 billion more than the original proposal.

This demonstrates the Government's sincerity and responsiveness.

To ensure that the WITS Scheme is viable and sustainable in the long run, it must target households that stand to benefit the most.

For example, sole bread-winners who have the entire family to support but are ineligible for the current TSS because they earn more than $6,500 are now covered.

We understand that there are concerns about the means testing mechanism, more specifically the household approach. This is not a cost-saving measure, as some critics have suggested. A household means test, which takes into account the economic situation of the whole household, would enable us to identify those with greater needs and ensure that public resources are channelled to them.

It is therefore more equitable than assessing only the individuals' income and assets. This approach is also consistent with other government financial assistance schemes. For these reasons, and as matter of principle, we cannot support a "dual-track" approach.

Indeed, under the household means test some 77,000 more people would qualify, compared to the individual means test.

Travel expenses can be a heavy burden on low-income employees and self-employed people. Our goal, as set out by the Chief Executive in his Policy Address last October, is to ease this burden on low-income households with employed members and promote sustained employment.

Deferring the discussion would only delay implementing the scheme. This is not in the best interests of the 436,000 potential beneficiaries.

I am confident that WITS will help those households most in need of this targeted support.

We will conduct a comprehensive review of the Scheme three years after implementation. A mid-term review will be carried out having regard to the experience gained during the first year of operation.

Once again, I appeal to our Legislative Councillors to give the green light to the WITS proposal and for their support in implementing the scheme as soon as possible

Ends/Friday, February 18, 2011