Saturday, November 28, 2015   

No upside to levy


Saturday, March 01, 2003

No matter how hard the government tries to justify its HK$400 levy per

month on foreign domestic workers, it will be seen as a cruel and

unjust tax on a section of the community that can least afford it. The

levy will affect 240,000 foreign domestic workers, of which the vast

majority, some 153,000, are Filipinos. On Thursday the Philippine

senate adopted a resolution denouncing the "discriminatory" levy.

The Philippine government is expected to take the issue to the

International Labour Organisation.

The levy will do nothing to enhance Hong Kong's image overseas.


Although described as a levy, it is really a tax on a section of the

population who earn about HK$3,670 a month. After the levy, which will

be paid by employers, the domestic workers' salary will be cut to just


The amount of revenue this will raise, about HK$1.4 billion, will

hardly put a dent in the estimated HK$70 billion deficit expected for

this financial year. There are some who even go as far as describing

the levy as racist.

Philippine senate president Franklin Drilon made the point this week

that "Hong Kong's success has always been built on free-market

principles and its reputation for openness to foreign trade,

investment and services. It has always prided itself on being a global

city and a free-market economy."

The levy on domestic workers goes against those principles.

To impose such a levy on the lowest paid defies logic and shows the

government as lacking compassion and bereft of coherent policies.

Indeed it comes at the same time the government cuts welfare payments

by 11.1 per cent to the unemployed, elderly, disabled and the mentally


The result the levy will achieve is what some sections of the

community are clearly hoping for and that is fewer foreign maids

seeking employment in Hong Kong.

Chief Secretary for Administration Donald Tsang has said the revenue

from the levy will be used to fund job training programmes for local

workers who will otherwise be on welfare. That is a spurious argument

as most of those on welfare are unskilled or semi-skilled workers,

many of whom are from the mainland anyway.

One can only assume that the retraining will go towards making beds,

cooking, cleaning, picking up school children and perhaps walking


What the government fails to understand is that, despite the low pay

of the foreign domestic workers, they spend money in Hong Kong.

The Hong Kong Human Rights Monitor has said that companies providing

remittance and cargo forwarding services will suffer, not to mention

the impact on local retail outlets and fast-food restaurants.

The government has no idea what foreign domestic workers contribute to

the local economy. This was clearly evident this month when legislator

Eric Li asked Secretary for Economic Development and Labour Stephen Ip

whether the government had ever conducted surveys on the average

monthly spending of domestics.

Ip admitted the government had no idea what the consumption and

spending patterns were for domestic helpers.

At the same time, Ip admitted that he had no idea how much foreign

maids remitted each month as there was no exchange control in Hong

Kong and foreign workers could make inward or outward remittances

without declaration.

The whole exercise is ill-conceived and in time will backfire on Hong


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