On June 9, the Legislative Council passed the Employment and Retirement Schemes Legislation (Offsetting Arrangement) (Amendment) Bill 2022, repealing the “offsetting” arrangement under the Mandatory Provident Fund.
Thanks to the promulgation of the National Security Law for Hong Kong and the improvement of the city’s electoral system, Hong Kong can finally put the 10-year contentious issue to bed, opening a new chapter on socioeconomic development toward prosperity.
Revoking the offsetting arrangement under MPF was initially proposed by Carrie Lam Cheng Yuet-ngor’s predecessor Leung Chun-ying in his 2012 manifesto. The business community opposed the proposal adamantly, accompanied by the business-leaning institutional structure, impeding the two administrations’ efforts to legislate an amendment to that arrangement. Moreover, along with the highly polarized atmosphere, LegCo concentrated predominantly on political issues, making it extremely difficult, if not impossible, to get the bill through.
During the pre-2020 constitutional reform period, the opposition was projected to occupy over 500 seats in the 1,200-member Election Committee. But since the opposition was still some 100 seats short of electing their favored chief executive, this granted enormous negotiating capital for the business community to leverage with the central government in exchange for their support for a pro-establishment candidate. To ensure a pro-establishment candidate received over 600 votes, this made the business community the “kingmaker”, acquiring an immense influence over the chief executive’s policy advocation. Furthermore, the functional constituencies of LegCo, which were constitutionally designed to look after the interests of the business community, comprised 50 percent of the votes in the legislative branch. Thus, the cause of the obstruction of any business-interests-conflicting policy in Hong Kong was rooted in its institutional setup.
So what factors have facilitated the passage of the bill all of a sudden? Was it because of the determination of the new administration? Or was it due to a surprise compromise by a stakeholder? These factors may be credited for some contributions, but the fundamental rationale of it falls on the promulgation of the National Security Law for Hong Kong and the improvement of the city’s electoral system. With these institutional reforms, the central government empowered the Hong Kong Special Administrative Region government and patriots to transform Hong Kong from chaos to governance, and gradually toward development and prosperity.
The National Security Law has lifted Hong Kong out of years of political turmoil, creating a calm and stable environment for the Hong Kong SAR government to operate. Focusing on socioeconomic problems consequently becomes possible. The objective of the improvement of the electoral system is not only to ensure the full implementation of the “patriots administering Hong Kong” precept but also to widen political representation to ensure a balanced and orderly political participation of the Hong Kong community through the recomposition of the Election Committee and the Legislative Council, including inter alia, expanding sector-representation in the Election Committee, restructuring the voter base of certain functional constituencies of LegCo and the Election Committee, and enlarging LegCo composition, thereby diluting the power of influence of the special interests within the governance structure.
By deflating the power of influence of the special interests in the political system through modifying the institutional setup, the passage of bills that are contrary to some of the business interests such as this becomes feasible. In the third reading of the Employment and Retirement Schemes Legislation (Offsetting Arrangement) (Amendment) Bill 2022, of the 89 voting LegCo members (excluding the President), 72 supported the amendment, five opposed it, and 12 abstained, resulting in an overwhelming 81 percent majority in favor of it, which would have been unimaginable just two years ago.
However, when one studies the voting composition in detail, one can discern three areas which should draw one’s attention. First of all, the voting result of this bill should not lead to the conclusion that all future bills that may pose a conflict of interests with the business community will be passed smoothly. According to former secretary for labour and welfare Law Chi-kwong, the cancelation of the offsetting arrangement under MPF only costs a general employer around 0.35 percent of their operating costs, thus the stake for the business community was not unbearable. The fact that some legislators from the pro-business political parties (namely the Liberal Party and Business and Professionals Alliance (BPA) for Hong Kong) deviated from the party’s voting preference (for instance, the Liberal Party’s Tommy Cheung Yu-yan and the BPA’s Priscilla Leung Mei-fun voted for the amendment) demonstrates that no business-backing party has issued a “three-line whip” to strictly instruct party members to vote according to the party’s position, which illustrates that the special interests may not have mobilized to obstruct the bill in full force.
Second, some fair-minded political observers reasonably contended that the LegCo members from the Election Committee should behave in a group manner, some even categorized them as “the national team”, however, the voting result of this bill proves otherwise. At least seven of the Election Committee members did not endorse the bill. Some expressed concerns though ultimately voted for it, some against it, and some cast a vote to abstain. This refuted the assumption that the LegCo members from the Election Committee would vote as a bloc; as the LegCo members from the Election Committee come from diverse backgrounds and are concerned with divergent interests.
Third, in the post-constitutional reform era, politicians’ attention is diverted from political topics to socioeconomic issues. Such issues often inflict a conflict of interests between different stakeholders in the community. The Employment and Retirement Schemes Legislation (Offsetting Arrangement) (Amendment) Bill 2022 offers Hong Kong a taste of the tussle between the labor force and the business community. Such conflicts will only intensify in the future when the stake of a policy broadens. One must be aware of the perpetual division between the pro-working-class bloc and the pro-business group within the patriots camp.
Then-chief executive Carrie Lam hailed the passage of the Employment and Retirement Schemes Legislation (Offsetting Arrangement) (Amendment) Bill 2022 as a significant milestone in enhancing the retirement protection of employees. In addition to that, this article argues that the success of getting the bill through itself also marks the beginning of a new era of governance toward prosperity for Hong Kong. Although we have to be vigilant of the contention between different stakeholders within the patriotic camp, there is little doubt that the enactment of the National Security Law and the improvement of the electoral system have revolutionized Hong Kong political ecosystem from a period of inexhaustible political debates to a time of development and prosperity, thereby opening a new chapter of governance for the lives of ordinary citizens in Hong Kong.
The author is a political commentator.
The views do not necessarily reflect those of China Daily.