MPF Burden Too Much When Subsidy Ends, Say Bosses

A group representing small and medium sized firms has warned against ending the so-called MPF "off-setting mechanism", saying this would put too much of a financial burden on them when a government subsidy scheme comes to an end.

A controversial clause allows companies to dip into their MPF contributions for workers to make long-service and severance payments. The government is proposing to set aside HK$17 billion to subsidise employers' payments over 12 years when the off-setting arrangement is scrapped.

Labour unions have been protesting against this off-setting practice for years.

But on Tuesday, Business Community Joint Conference which represents more than 100 small and medium sized enterprises warned that the financial burden will be too much for them if the provision is cancelled.

Liberal Party lawmaker Felix Chung, who is a member of the alliance, said when the government subsidy period runs out, the entire burden will have to borne by the employers.

The group had taken out full page advertisements in local newspapers to publicise their opposition to the government move to revamp the MPF.

The previous administration had approved a HK$7.9 billion subsidy over 10 years for employers, in return for phasing out the much-criticised practice. The present government raised the amount to HK$17 billion and extended the time period earlier this year.