Heavenly Transport
In my opinion the $2 transport fare scheme for the elderly is one of Hong Kong’s most socially significant success stories. But some of the recent changes, and further ones contemplated for later, seem to be rowing in a different direction. I think we need to pause and take stock before we inadvertently undo some of our own good work.
In the process we should also take the chance to ensure the long term affordability of the scheme.
The subsidy scheme was first introduced in 2012 following an announcement in the 2011 policy address by then chief executive Donald Tsang Yam-kuen. It applied to seniors aged 65 and above, plus persons with disabilities. The objective was that seniors should be encouraged to continue – or at least not discouraged from continuing – to play a full part in daily life, rather than withdraw into their shell and become housebound.
The first public transport operator covered was the Mass Transit Railway Corporation. The scheme was soon extended to franchised bus companies (2012-13), then ferries (2013) and green minibuses (2015) then other transport operators as various practical issues were overcome. In simple terms, the qualified passenger pays a set fee of $2 for the trip and the government reimburses the transport operator the difference between that sum and the actual fare after taking into account the operator’s own discount arrangements.
In 2022 the qualifying age was lowered from 65 to 60 at the behest of then chief executive Carrie Lam Cheng Yuet-ngoh, apparently in an attempt to boost her personal popularity and possibly secure a second term.
There are now more than 2.67 million beneficiaries (around one third of the entire population) and the costs have exploded from $1.2 billion in 2019-20 to $4.8 billion in 2025-26. All the evidence suggests the scheme has been very popular, some seniors have continued to work past normal retirement age as transportation costs have not served as a deterrent, while others may have ceased to be economically active but have nonetheless vigorously maintained social and family ties around the city.
Operation of the scheme was comprehensively reviewed in 2018-19 and a report submitted to the legislative council in early 2020. At that time there was already concern about the escalating costs (even before the qualifying age was lowered to 60) and various options were floated for capping expenditure such as setting a maximum number of trips an individual could take or setting a ceiling on the amount of subsidy an individual could enjoy in any given period.
Faced with the prospect of costs rising exponentially, the government moved last week to implement a relatively modest reform. Starting from Friday, the qualified passenger pays $2 or 80 per cent of the set fare whichever is higher. In practice only journeys where the fare exceeds $10 are affected. For example, where the bus fare is $20, the passenger will pay $4 instead of two. He still enjoys a significant saving compared to regular passengers of course.
Even this modest change has attracted critics. A 66-year-old senior still working complained in this newspaper he would have to pay more traveling from his Kowloon home to his job on Hong Kong Island. I have sympathy with this point: every person who needs to cross the harbour by whatever means is going to be paying more, those in more remote parts of the New Territories even more so. Those who travel occasionally for social reasons will not be hard hit but those who travel daily for employment will feel the effects.
Of course no system can adapt to the circumstances of every individual. There will always be some winners and losers from every change and the taxpayer cannot be expected to shield everyone from any adverse effect. Our IT systems have now advanced to the stage where we could in theory tinker extensively (setting maximum number of eligible trips per month, capping the amount of official subsidy in any given period etc.) But this might not get us very far: most individuals would then lose track of where they stood at any one time.
Having regard to all the circumstances, I would recommend keeping things simple. Before the government does any more fine-tuning it should take two bold steps: increase the individual’s contribution to $3 per trip immediately with five-year reviews hereafter. Bearing in mind the $2 rate has applied for 14 years I don’t think that is unreasonable. And secondly, it should seize the bull by the horns and progressively raise the qualifying age to the original level of 65. The messaging behind the 2022 decision was very damaging as it implied the new normal retirement age was coming down to 60. In fact as an aging society we should be conditioning the whole community to be thinking in terms of working to at least 65, and in due course, beyond.
Enjoy the journey!