Give SMEs more help

The SAR government announced on Wednesday it had accepted the recommendation by the Minimum Wage Commission to raise the minimum wage baseline from HK$28 to HK$30 an hour. The new rate is to take effect on May 1 next year, with more than 220,000 employees expected to get a raise consequently. Under pressure from rising inflation, both sides of the minimum wage negotiations finally agreed on a HK$2 hike on the current baseline, demonstrating their willingness to compromise on equal terms.

There is no doubt that small and medium enterprises (SMEs) will feel the pinch of increased labor cost. The government should shoulder a bigger share of poverty relief to prevent higher minimum wage from weighing down SMEs. It is the government's responsibility to help ease the expectation on employers to reduce "on-the-job poverty" with higher minimum wage by increasing financial assistance for needy households.

It is fair to say the HK$2 raise of the minimum wage is mild and reasonably balanced. It should help ease inflationary pressure on low-paid workers somewhat, thanks to all parties involved in the protracted negotiation process. However, while big businesses should have little problem footing the extra labor cost, it could make some SMEs unable to hire more hands.

According to government estimates, local employers will have to fork out a total of HK$2 billion more in salaries for their employees when the new minimum wage baseline becomes effective and about 80 percent of it will be in the four lowest-paid occupations, including security guard, bar and restaurant worker and cleaning services, which may have difficulty hiring enough hands or be forced to cut back payrolls.

In fact, after one and a half years since the implementation of the minimum wage in May 2011, some employers are still grappling with certain issues they ran into from the start. Therefore the government should step up assistance for labor-intensive SMEs that depend very much on affordability to survive, alongside the big chains. It is also necessary for the government to keep up poverty relief measures instead of assuming that higher minimum wage would make up some of that spending.

This is an excerpted translation of a Wen Wei Po editorial published on Dec 13.

No-confidence vote futile

Kwan Chiu

The Legislative Council (LegCo) on Wednesday rejected a motion tabled by an opposition lawmaker for a vote of no confidence against Chief Executive Leung Chun-ying. The rejection was a matter of course, because it was a senseless, unreasonable and unjustifiable effort to force Leung out of office over some unauthorized building works (UBWs) at his Peak residence.

Leung's somewhat messy handling of the UBW controversy proved a letdown for many local residents, but that episode alone is not enough to strike Leung out. After all, he was elected according to law and approved by the central government as chief executive of the HKSAR. Between the clumsy handling of the UBW mess and his job performance since taking office, including measures to quicken the pace of public and subsidized housing supply, zero quota for non-local women from the mainland to give birth in public hospitals, introducing the Old Age Living Allowance scheme, re-establishing the Committee on Poverty, pushing for the northeast NT development and increasing cooperation with Guangdong province. There is really no question as to which is more important - Leung made mistakes over UBWs or the collective interest of Hong Kong society?

Leung's handling of the UBW controversy was without a doubt flawed, but that is not reason enough to question his commitment to applying the principle of "One Country, Two Systems", "Hong Kong people governing Hong Kong" and the Basic Law or his determination to develop Hong Kong's economy and improve people's well-being. Therefore it would be better to let Leung prove himself working as the CE than any other way.

In the future, the society should give Leung and his administration more time and elbow room to do their best and prove their worth to the public, beginning with implementing the first Policy Address to be released in January next year. Apparently the opposition camp's push for a no-confidence vote against CY Leung was a waste of everything and bound to fail, because the opposition's goal was not to solve the UBW problem, but rather to unseat the CE in another attempt to agitate the central government and destabilize Hong Kong.

The author is a veteran in current affairs commentary. This is an excerpted translation of her column published in Ta Kung Pao on Dec 13.

(HK Edition 12/14/2012 page3)