MPF Subsidy Plan Not Good Enough: SME Association

The Chairman of the Hong Kong Small and Medium-Sized Enterprises Association, Stephen Kwok, has warned that businesses wouldn't be able to afford to make severance and long-service payments without continuous subsidies from the government, if and when the MPF off-setting mechanism is scrapped.

The government is believed to be planning to spend HK$17.2 billion on subsidies over a 12-year period from when firms are stopped from dipping into workers' MPF accounts to make such payments.

Chief Secretary Matthew Cheung and Labour Secretary Law Chi-kwong met representatives of the business sector and some lawmakers on Thursday morning to brief them about the proposals.

After the meeting, Kwok said the government would have to continue to support businesses in the long-term and SMEs would not be able to shoulder the extra costs after the subsidy period ends.

Liberal Party leader Felix Chung, who also joined the meeting, agreed that business leaders aren't happy with the government's plan, which he said is too complicated for many.

"A lot of the business leaders think it is not workable. They worry about what will happen from year 13 ... a lot of the business sector leaders say they will not accept this," Chung said.

"They are asking the government to make a proposal that can have a permanent settlement on this issue and not just a transitional period."

After labour representatives met the two secretaries later in the day, labour sector lawmaker Ho Kai-ming said he welcomed the government's proposal, describing it as a step forward in improving people's retirement benefits.

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