|
These proposals
would adversely affect FDHs who are already receiving the
lowest wages and working the longest hours in Hong Kong. It is our
view that the proposed levy or any measure that would reduce the
existing remuneration of FDHs at this time would be
inequitable and clearly discriminatory.
As Hong Kong faces
great economic challenges, the Philippine Consulate General hopes
that the HKSAR Government will find more creative ways in addressing
its budget deficit, its rising unemployment problems and the plight
of its local domestic helpers other than targeting FDHs.
The
Consulate has faith and confidence that the HKSAR Government, in the
review of its over-all policy on foreign domestic helpers, will
exercise its prerogative judiciously and fairly in the best
interests of all parties concerned.
The Philippine Consulate General is greatly
appreciative of the openness and reasonableness of the HKSAR
Government in welcoming our inputs to the review of policies
impacting on FDHs.
In this spirit, the Philippine Consulate
General wishes to submit, for the consideration of the HKSAR
Government, the following views and comments which were put together
in the course of its consultation with the Filipino domestic
helpers, the Filipino expatriate community, the business community,
concerned colleagues in the consular corps and other concerned
groups in Hong Kong:
The Philippine Consulate General hopes for
the HKSAR sympathetic understanding of its inputs.
1.
FDHs favorably contribute to the Hong Kong
economy.
The HKSAR Government and the Hong Kong
people have always acknowledged the significant contributions of FDHs
to the Hong Kong economy.
a)
With reliable Filipino domestic helpers at home, Hong Kong
women have been given the opportunity to look for lucrative jobs,
thus, increasing productivity and household incomes in Hong Kong.
 b)
Despite the sluggish economy, demand for FDHs has
increased. This is because more housewives have been forced to
re-enter the job market to make both ends meet. These women can do
so only by delegating their household duties to the helpers.
c)
A substantial part of the income of Filipino domestic helpers
is spent in Hong Kong. A survey conducted by Hong Kong News
reveals that only 45% of a Filipino workers’ salary is remitted to
the Philippines. The remaining 55% is spent for personal and other
services. This means that a bigger portion of the helper’s income
is plowed back to the economy through their consumption of goods and
services in Hong Kong.
d)
As Filipino domestic helpers are subjected to the same
economic difficulties as other Hong Kong residents (such as
increased cost of food, clothing and other basic necessities), any
measure that will reduce directly or indirectly their income would
adversely affect their spending capacity to buy Hong Kong goods and
services.
2.
The proposed levy on FDHs or their employers or any
reduction in the minimum allowable wage (MAW) of FDHs is inequitable
and discriminatory.
a)
The poor and the weak in society need the most protection. FDHs
are vulnerable to exploitation considering their existing wage level
and the nature of their employment and therefore in most need of
government protection. Imposing the levy or further lowering
their meager income could open the floodgates to more exploitation.
The rationale of having a minimum wage is to provide protection and
a safety net to the weakest and poorest in society, specially in
times of an economic downturn.
b)
The proposed levy is unjust and inequitable. Proponents
conveniently call it levy on employers but it is coupled with a
corresponding wage cut on FDHs in the same amount. It is
actually an indirect
tax on FDHs. In Hong Kong, in order to be liable to salaries
tax, a HK resident must have an annual income of HK$108,000 (or HK$
9,000.00 a month) if one is single, or, HK$ 216,000 a year (or
HK$18,000 a month) if married, or, HK$246,000 a year (or HK$20,5000
a month) if married with one child, and so on.
If the proposal is approved, FDHs will be directly or
indirectly be paying HK$6,000 a year. FDHs already receive
the lowest wages and work the longest hours and yet the FDHs’
earnings are being proposed to be taxed by around 14% to 20%. Taking
into consideration Hong Kong’s salary tax structure, the proponent
of this levy is saying that the FDHs who earn HK$3,670 a
month, is of the same taxable bracket as a Hong Kong junior
executive who earns more than 7 times her salary. If the HKSAR
Government approves a new law taxing FDHs by HK$ 500 to
HK$750 a month, in whatever form and scheme, it will in effect be
carving out a new class of taxpayers from the Hong Kong population,
separate and distinct from the present taxpayers, and tax them
higher than most low to middle-income members of the population.
 c)
The proposed levy is discriminatory. If a tax is to be
applied to imported workers, it should be across the board on all
domestic workers and all those who are admitted under the scheme for
professionals and skilled workers from all sources.
d)
It is unjust for FDHs to share Hong Kong’s pain
but not its gain. Monthly household income and GDP since 1982 shows
that an FDH’s salary has lagged behind the growth in Hong
Kong’s GDP and median monthly income. In the meantime, wage levels
for cleaners in sanitary services working for eight hours a day rose
from HK$5,062 in 1999 to HK$5,430 in 2001 while workers in Chinese
restaurants working 9 hours a day received HK$6,782 in 1999 and
HK$6,873 in 2001. In contrast there was no increase in wages of
FDHs working 16 hours a day, six days a week, from 1999 to 2001.
When the Hong Kong economy grew by .3% in 1999 and by 10.5% in 2000,
there was no increase in the wage level of FDHs. Now that
there is a downturn in the economy, FDHs are being targeted
as one of the first to share the pain of having reduced wages.
3.
Reducing the meager wages of FDHs or imposing
additional burden on employers of FDHs at this time will
adversely affect Hong Kong’s economic growth.
a)
Any increase in the rate of salaries tax on employers of FDHs,
many of whom are middle-income families or any measure that would
reduce FDHs wages would impact negatively on their
consumption of local goods and services amounting to estimated HK$ 3.6
billion a year and harm Hong Kong’s economic growth. |
b)
The imposition of a levy or any measure that would reduce in
real terms the minimum allowable wage (MAW) of FDHs will have
an adverse impact on the over-all wage level in Hong Kong. As FDHs
are the only of workers subjected to the MAW, the wage level for FDHs
serves as a guideline or a barometer in the consideration of the
overall wage structure. This will also adversely affect wage level
of local domestic helpers and further exacerbate the unemployment
situation.
4.
Targetting the income of the lowliest paid workers as a
source of revenue in addressing the budget deficit and other
economic problems may negatively impact on the good image of Hong
Kong in the international community.
a)
It may not look good for the HKSAR Government to make the
lowliest paid workers bear the brunt of the sacrifice during bad
economic times.
b)
 Hong Kong’s success has always been built on free market
principles and its reputation for openness to foreign trade,
investment and services. Hong Kong has always prided itself to be a
global city and a free market economy. Any measure that would
restrict the admission or the continued presence of FDHs
would in effect be considered undue restriction on the free flow of
services. Imposing a levy on employers, in a sense, as a penalty for
hiring FDHs and cutting the wages of FDHs would convey
the wrong signal to the world that Hong Kong is now on a shift on
its economic philosophy or on a major policy shift on its external
relations or in such dire economic strait that it has to include its
lowliest paid workers as additional sources of revenue.
c)
The proposed levy on employers and the corresponding
reduction of the wages of the employees in the same amount is an
indirect tax on the FDHs.
A levy of $500 to HK$ 750 will account for around 14% to 20%
of the meager salary of those FDHs earning a minimum wage of
HK$3,670. If they have to pay, it would only be fair for all
expatriate workers and professionals to be subject to the same
requirements.
5. Reducing the wages of of FDHs will not necessarily
promote the hiring of local domestic helpers (LDHs) or
address the rising unemployment problem.
a)
LDHs and FDHs are serving different groups of
people and cater to two different markets. LDHs usually do
not like to stay overnight in employers’ homes. LDHs would
not want to work in areas like the main island of HK including other
parts of Kowloon where most employers reside because of the long
distance. LDHs also would not want to work long hours because
they also have their own families to take care of. Even if LDHs
can work full time, they will not be able to live on the minimum
wage set for FDHs.
d)
FDHs and LDHs are not competitors since they
serve different markets and can work together to serve Hong Kong
citizens.
e)
Most unemployed people are those who work in the decoration,
construction, hotel, bank and other areas of the service sector.
There is no need to pass measures targeting the FDHs as a
solution to the unemployment problem.
6.
Comparison of the level of the wages of FDHs in Hong Kong
with other “selected” countries in the world is not tenable, not
appropriate and is misleading.
a)
The argument that since foreign domestic helpers are one of
the highest paid in Asia and can well afford a deduction ignores
economic realities and varying conditions. To compare the wage level
of FDHs in Hong Kong with that of Singapore, Malaysia and
other selected countries is a flawed proposition. According to the
latest survey by Mercer Human Resource Consulting, published in July
2002, Hong Kong is now the world’s most expensive city. Singapore
is twelfth on the list, over 40% cheaper than HK, while Kuala Lumpur
is sixteenth, with prices almost half that of HK’s. Moreover,
value for quality services we believe is the main gauge for
determining wages.
b)
The setting of the minimum wage for the lowliest paid
workers, including the MAW in Hong Kong, should be scientifically
calculated on the basis of various factors, including the cost of
living in a particular country. In fine, the setting of the MAW in
Hong Kong should be based on the cost of living in Hong Kong not on
the basis of the cost of living in the Philippines, Indonesia,
Thailand, Nepal, Bangladesh, India, Pakistan, Sri Lanka, Myanmar,
Malaysia, Singapore and other countries where the workers come from.
c)
The Singapore system was invoked to rationalize the
imposition of a levy on FDHs in Hong Kong. It is to be noted,
however, that the Singapore levy system does not single out foreign
domestic helpers as it applies to all foreign workers such as those
employed in construction, manufacturing, marine, harbor craft,
conservancy, process industry, grass-cutting, and service sector.
Furthermore, the Singapore levy was effected prior to the admittance
of foreign workers.
d)
Others have pointed out that the Philippine peso has
depreciated vis-à-vis the Hong Kong dollar and, hence, any
reduction in the wages of Filipino domestic helpers would not badly
affect them and their families in the Philippines.  Wages are
determined by the cost of living in the place of work. Costs of
goods and services in the Philippines have also increased
considerably, diluting most of the salutary effects of any foreign
exchange windfall. Moreover, a substantial portion of the salaries
of Filipino domestic helpers are spent for their basic necessities
in Hong Kong (such as food, clothing, transport, phone cards and
other goods that they send to their families in the Philippines),
all priced in HK dollars.
7. Comments on the
Proposed Freezing of the number of FDHs
a)
Freezing the number of FDHs in Hong Kong or setting a quota
on the number of FDHs allowed to work in Hong Kong could be
considered undue restriction on the free flow of services and
inconsistent with Hong Kong’s adherence to free market enterprise
principles.
b)
HK employers will have difficulties finding FDHs if there is
a quota. Since the the market for FDHs and LDHs are different,
freezing the number of FDHs would not necessarily create jobs for
local people. Moreover, the market for FDHs emerged because medium
income families could afford them since ldhs cammand a higher
salary.
c)
Setting a quota for FDHs will force HK women to return home
and thus affect HK competitive capacity and household income. |
