'Offering Loans To The Jobless Is The Worst Option'

A social policy academic from Lingnan University on Sunday strongly criticised the government's plan to provide low-interest bank loans to the jobless, saying that's the worst option the authorities can offer to the unemployed.

Financial Secretary Paul Chan announced in his budget on Wednesday that those who've lost their jobs over the past year can apply for a low-interest loan of up to HK$80,000 that will be fully guaranteed by the government.

But Au Yeung Tat-chor, an assistant professor of sociology and social policy, said the proposal is not just less than ideal but is the the worst of all possible solutions, warning that there was a significant risk of loans ending up as bad debt.

"The government has already estimated that the bad debt will reach about 25 percent; actually it is a quite high percentage of the bad debt," he said.

"And of course it's because the government, they don't require the unemployed who want to borrow to...[show] proof for their economic status and that's why the bad debt percentage will be so high."

Speaking after attending RTHK's City Forum programme, Au Yeung said he was left disappointed that the authorities didn't offer any direct temporary unemployment assistance, but essentially passed the responsibility of social protection to the unemployed themselves by asking them to take loans.

"I am very sceptical that this budget can help the poor, especially for the unemployed."

"Basically the government transfer the cost and risk of unemployment to those unemployed persons...and I guess this is not the best solution, it's the worst choice for the unemployed," Au Yeung told RTHK's Candice Wong.