Archive for the ‘Universal Transfers’ Category

the politics of universal pensions in Hong Kong

Monday, January 16th, 2017

One of the three candidates for Chief executive of Hong Kong is a strong supporter of universal age pensions for the territory’s residents. Suffrage in Hong Kong is severely limited, though, so the pro-universal candidate has little chance of winning the election, scheduled to take place at the end of March.

Chief executive hopeful Woo Kwok-hing warned voters against his “dangerous” rival Carrie Lam Cheng Yuet-ngor, describing her as an autocrat who would decide everything by herself for the Hong Kong people.

Speaking before a public forum yesterday, Woo described Lam, who resigned as chief secretary on Thursday, in a negative light when asked by Lay Yan-piau, an Election Committee member from the social welfare subsector, to comment on Lam’s disregard of University of Hong Kong professor Nelson Chow Wing-sun’s research report which endorsed a universal pension.

The retired judge said Lam was “dangerous” as she talked like an autocrat, making all the plans for Hong Kong without public consultation on issues which should engage the public. ….

Woo reiterated his support for a universal pension scheme financed by tripartite contributions from employers, employees and the government as suggested by the scholarly proposal.

Phoenix Un, “‘Dictator’ Lam mustn’t lead HK, warns Woo“, The Standard (Hong Kong), 16 January 2017.

Woo Kwok-hing (born 1946) is competing against two pro-Beijing candidates: Regina Ip (born 1950) and Carrie Lam (born 1957). A new Chief executive will be selected by the 1,200-member Election Committee on 26 March 2017. Woo would like to see the voter base for choosing the Election Committee expanded from the current 250,000 to one million by 2022, three million by 2032 and eventually near-universal suffrage.

update on Hong Kong’s universal pension proposal

Friday, December 30th, 2016

The government’s lack of sincerity is becoming increasingly evident. (more…)

stumbling toward universal pensions in Hong Kong

Saturday, December 17th, 2016

Sad news from Hong Kong. What is the point of government consultation with voters, if government chooses to ignore dissenting views?

An official advisory commission on universal pensions, after three years of discussion and consultations, convened and released its Report on Thursday, 15 December. The Commission on Poverty of Hong Kong’s Legislative Council (LegCo) discussed the Report. LegCo is expected to retain a means-test for social pensions, even though the Report finds overwhelming public support for universal pensions. (more…)

medicare in Canada

Thursday, September 8th, 2016

Medical care in Canada is widely praised, and is indeed excellent, especially compared to the costly medical care system of its southern neighbour. Slowly and illegally, though, in some provinces the system is becoming less universal. If this trend continues, access to basic health care in Canada will depend more and more on price (ability to pay) rather than need.

Dr Ryan Meili, a Saskatchewan physician, appeals for the federal government to restore the universality of medicare by enforcing existing legislation (the Canada Health Act).

Extra-billing in Ontario, private MRIs in Saskatchewan and user fees in Quebec: violations of the Canada Health Act are on the rise across the country. Canadian doctors are concerned about the impact of this trend not only on their patients, but on our public health care system as well.

…. Provinces that are not in compliance [with the conditions for payment under the Canada Health Act] are to be penalized with a reduced Canada Health Transfer (CHT) payment.

This year’s report showed that in 2014-15, the only province that received such a penalty was British Columbia. Their CHT payment was docked $241,637 ….

In Ontario alone, the frequency of such charges has grown at an alarming rate …. [I]ndependent health facilities (e.g. eye surgery, colonoscopy, diagnostic and executive health clinics) charged extra fees for medical consultations, examinations, diagnostic testing and other manners of “upgraded services.” These fees are for services that are covered by the health system. This is otherwise known as extra-billing, a practice that is against federal and provincial law.

Despite these contraventions, … Ontario has never been penalized. ….

User fees, access charges, extra billing all come down to the same thing — inequitable access to Canadian health care.

Charging patients at the point of care for medically necessary services strikes at the heart of the principle that access to health care should be based on need rather than ability to pay. It undermines equity, increases system costs and reduces public commitment to universal coverage. ….

It is time … to ensure medicare will be there for all Canadians in their time of need.

Ryan Meili, “It’s Time For The Federal Government To Enforce The Canada Health Act“, The Blog, Huffington Post, 4 April 2016.

Dr Meili (born 1975) is a family physician. He teaches at the University of Saskatchewan’s College of Medicine, where he heads its Division of Social Accountability.

HT Chris Willmore.

call for universal pensions in India

Thursday, August 25th, 2016

India’s trade unions are calling for a general strike on September 2nd, demanding a minimum pension of about 45 US dollars a month for all workers, formal and informal. The proposed pension is not fully universal, however, as it excludes unpaid workers, such as mothers, housewives and the self-employed.

Demanding universal pension of Rs 3000 [USD 45] per month to every worker, including those engaged in unorganised sector and proper application of labour laws for safe guarding interests of the working class, various trade unions will observe general strike in the country on September 2. In a bid to garner support for the stir, CPM General Secretary Sitaram Yechury has posted a series of tweets on his official page last night … stressing for Rs 3000 pension to all workers, organised and unorganised.

Unions to go on strike on Sept 2 demanding Rs 3000 pension to every worker“, webindia, 25 August 2016.

India Pension

 

 

the case against mandatory contributions to pension schemes

Tuesday, August 23rd, 2016

Two years ago I prepared, for the record, an annotated version of my June 2000 paper “Three Pillars of Pensions? A Proposal to End Mandatory Contributions”.  This paper in 2000 marked an important moment in my life, the beginning of an obsession with reform of old age pensions.

The annotated version of the paper has been accessible only at larrywillmore.net. To make this version widely available, in a permanent fashion, I uploaded it today to the Munich Personal RePEc Archive (MPRA). It can now also be accessed at the following link (free registration required):
https://mpra.ub.uni-muenchen.de/73288/1/MPRA_paper_73288.pdf

This short paper defined my future work on pension reform. In April of the year 2000, I was at an OECD conference in Prague, listening to presentations of two World Bank economists (Estelle James and Dimitri Vittas). At that moment, it suddenly dawned on me that an ideal pension system should provide basic pensions for everyone, funded pay-as-you-go from general government revenue, allowing citizens who desire more than basic income in retirement to save in any way they please, without subsidies, tax breaks or coercion from government. This was my ‘Eureka’ moment.

When it was my turn to speak, the very next day, I spoke with excitement and enthusiasm. The conference was on private pensions, so the audience did not react warmly to my talk. Nonetheless, I presented my core ideas orally, and drafted a discussion paper immediately after the conference.

The OECD published a version of my paper “edited for length” in 2001 on pp. 385-397 of its “Private Pensions Conference 2000” proceedings. The editors changed the subtitle from “A proposal to end mandatory contributions” to a blander “Is there a need for mandatory contributions?” In my opinion, the OECD editors removed essential points from the paper. For the record, I have highlighted all their deletions in yellow, so readers can judge for themselves how much of importance was omitted.

Have a look at the deletions the OECD editors made. Decide for yourself whether these were fair, helpful or necessary.

good news for poor children in California

Sunday, July 24th, 2016

Four decades ago, California and 21 other US states passed legislation denying additional benefits to mothers on welfare if they had more children. These measures were inspired in part by the “welfare queen” rhetoric of Ronald Reagan and others.

It took 22 years, but California finally acknowledged last month that the ban was cruel and ineffective. …  Gov. Jerry Brown quietly signed into law the repeal of the so-called maximum family grant cap. “I don’t know a woman — and I don’t think she exists — who would have a baby for the sole purpose of having another $130 a month,” declared State Senator Holly Mitchell, a Democrat who led the repeal, in denouncing “a racist, classist, sexist policy.”

Repeal means $220 million a year in extra welfare aid to provide $136 a month for each of 130,000 children in 95,000 families. ….

California is the seventh state to repeal family caps since 2002 on the basis of studies showing that the strictures have had no effect on the birthrates of welfare mothers. ….

The family cap laws … are still in place in 15 states. The New Jersey Legislature voted to repeal the family cap last month. But Gov. Chris Christie vetoed the measure, saying that non-welfare mothers “do not automatically receive higher incomes following the birth of a child.”

Editorial Board, “California Deposes Its ‘Welfare Queen’”, New York Times, 24 July 2016.

Governor Chris Christie is wrong. Non-welfare families receive an income tax deduction for each additional dependent, so their after-tax income increases following the birth of a child. After-tax income is what matters for the family budget. Note, however, that the value of this gift of reduced taxable income is greater for high-income taxpayers, who are almost always in high tax brackets compared to low-income taxpayers. The value an additional dependent allowance is zero for parents on welfare, who earn so little they have no taxable income.

A more equitable way to combat child poverty would be to replace deductions for dependent children with universal child credits. The credits should be taxable as income, thus ‘clawed back’ in part from families with taxable income. This is the system used in many countries.

contributory and non-contributory pensions in Vietnam

Friday, July 22nd, 2016

The World Bank this week (19 July) released a report on Vietnam that emphasizes the challenges of coping with an ageing population. I have not seen the report, but an online news feed provides a brief summary. Here are some extracts.

[T]he rate of participation of the people in the retirement fund is still low, reaching only 22% of the workforce, while the majority are only entitled to a small social pension if they live to the age of 80.

The [contributory] pension system in the formal sector is financially unsustainable though it underwent reform in 2014. ….

[A proposal to lower] the age … [of eligibility for the] social pension from the current level of 80 years … has … not yet [been] approved. …. Besides, the social pension is very low, only equivalent to 10% of the average income ….

The official [contributory] pension … [is] currently … 3% for women for each year of contribution and 2.25% for men. Compared to international standards, this is a very high rate and unsustainable ….

Despite the high rate, the practical benefit is lower because most people only contribute based on the basic salary, which is usually the minimum wage.

In 2014, the Vietnamese government implemented reforms to expand the contribution base … [to include] not only the basic wage but also allowances, bonuses and other remuneration regimes. ….

[The World Bank recommends three policy changes.]

Firstly, gradually reduce the social pension age from 80 to 70. Secondly, … expand the … subsidized program [of social pensions for the informal sector]. [Emphasis added.]

Thirdly, … Vietnam cannot maintain the current [contributory] system without reform.

WB report: Vietnam’s pension system faces challenges“, VietNamNet Bridge, 22 July 2016.

HelpAge International (Pension Watch) reports that Vietnam’s social pension of 180,000 Dong (9 US$) a month is pension-tested for those aged 80 and older, and means-tested for those aged 60-79 years. The social pension, according to the same source, reaches 2% of Vietnam’s 60+ population.

I don’t understand the discrepancies between information from the World Bank and that from Pension Watch. Is there a social pension for persons aged 60-79 years? Or is it limited to those aged 80 and older? If the social benefit is pension-tested for those aged 80 years and older, this implies that 100% of the 80+ population receives some sort of cash pension, unless take-up of the social pension is low for reasons other than eligibility.

Perhaps someone from Pension Watch can clarify this. I appreciate the good work that Help Age does, filling gaps in our knowledge of social pensions. Non-contributory pensions are sadly neglected by the World Bank, ILO and other institutions, so the country data posted at Pension Watch are very helpful.

universal pensions in Hong Kong: the struggle continues

Tuesday, June 21st, 2016

The HK government’s six month “public consultation” is coming to an end. The universal pension scheme recommended in the report commissioned by the government is not likely to be adopted, despite widespread public support for the proposal, much of which could be funded by diverting mandatory retirement savings to the government coffers.

Here are excerpts from three recent articles published in a leading Hong Kong newspaper. Click on the links to read the full columns. (They are not gated; access is free.)

Organizers claimed about 5,000 people marched to the Chief Executive’s Office yesterday to demand universal retirement protection while slamming a public consultation exercise as fake because administration officials have made it clear they want a proposal with a means test. ….

Alliance for Universal Pension spokesman Nicholas Chan Hok- fung pointed out that 300 younger people had volunteered to push the wheelchairs, indicating a willingness to take on responsibilities for looking after seniors.

On that, volunteer Wong, 27, did not agree with the official line being disseminated about a universal pension becoming too much of a load for workers. “With a universal pension scheme it will actually reduce our burden as our parents will be receiving a monthly allowance,” he said. ….

The crowd dispersed after putting stickers outside the Chief Executive’s Office that read “Leung Chun-ying must keep his promise” and “Support the Universal Pension 2064 Scheme.”

The 2064 refers to a scheme drafted by 180 scholars who reject the official claim that a universal pension will not be sustainable.

Carain Yeung, “Pension protesters press their demand for universal formula“, The Standard (Hong Kong), 20 June 2016.

Most representatives from 80 groups who spoke at the last Legislative Council public hearing on retirement protection yesterday said they wanted a universal pension.

The four-hour hearing came on the eve of the deadline for the government’s six-month public consultation. ….

Alliance for Universal Pensions members again slammed the government for its “fake consultation” and said its own consultation conducted from January to May – with 11 public forums held – found that most supported a universal pension scheme.

Carain Yeung, “Legco last words on pensions“, The Standard (Hong Kong), 21 June 2016.

A member of the Commission on Poverty, Law Chi-kwong, says public views on a universal pension are still divided after six months of public consultations.

The exercise ends today and findings will be forwarded to an independent consultancy for analysis. ….

The government had said the universal pension proposal was unsustainable.

The head of the commission, Chief Secretary Carrie Lam, said last week that she hoped the government can finalise a retirement protection policy before its term ends in June next year.

RTHK, “Poverty official questions pension proposals viability“, The Standard (Hong Kong), 21 June 2016.

more on universal basic income

Monday, June 13th, 2016

Further to Friday’s post (and earlier ones), financial journalist James Surowiecki (born 1967 in Connecticut) has a great column on universal basic income (UBI) in the current issue of The New Yorker. I have copied and pasted highlights below. Click on the link below to read the full column. (Access is free.)

In the mid-nineteen-seventies, the Canadian province of Manitoba ran an unusual experiment: it started just handing out money to some of its citizens. The town of Dauphin, for instance, sent checks to thousands of residents every month, in order to guarantee that all of them received a basic income. The goal of the project, called Mincome, was to see what happened. Did people stop working? Did poor people spend foolishly and stay in poverty? But, after a Conservative government ended the project, in 1979, Mincome was buried. Decades later, Evelyn Forget, an economist at the University of Manitoba, dug up the numbers. And what she found was that life in Dauphin improved markedly. Hospitalization rates fell. More teen-agers stayed in school. And researchers who looked at Mincome’s impact on work rates discovered that they had barely dropped at all. The program had worked about as well as anyone could have hoped. ….

Critics of the U.B.I. argue that handing people cash, instead of targeted aid (like food stamps), means that much of the money will be wasted, and that a basic income will take away the incentive to work, lowering G.D.P. and giving us a nation of lazy, demoralized people. But … most of the basic-income experiments suggest that the disincentive effect wouldn’t be large; in Manitoba, working hours for men dropped by just one per cent. It’s certainly true that the U.B.I. would make it easier for people to think twice about taking unrewarding jobs. But that’s a good consequence, not a bad one.

A basic income would not be cheap …. Yet the most popular social-welfare programs in the U.S. all seemed utopian at first. Until the nineteen-twenties, no state in the union offered any kind of old-age pension; by 1935, we had Social Security. Guaranteed health care for seniors was attacked as unworkable and socialist; now Medicare is uncontroversial.

James Surowiecki, “The Case For Free Money“, The New Yorker, 20 June 2016.

The results of the UBI experiment in Manitoba are not surprising, since UBI does not pay people to remain unemployed. Beneficiaries collect UBI regardless of whether they work or not. In short, UBI provides strong incentives to remain employed, or look for a job.