||An Ageing Population
An ageing population is an internal challenge for Hong Kong that will have a profound impact on our community and economy. The number of people aged 65 or above is expected to rise sharply in the next 20 to 30 years. At present, one in eight persons in Hong Kong is in this group. By 2033, only 25 years away, that figure rises to one in four persons.
Meanwhile, the working age population will begin to fall gradually after 2014. The increasing elderly population will increase the burden on the working population. At present, every two elderly persons are supported by about 12 people of working age. By 2033, however, every two elderly persons will be supported by only about five people of working age. This means that the burden on each working person will more than double. Therefore, unless there is a substantial increase in labour productivity, an ageing population will lower our standard of living and undermine economic vitality and competitiveness. We must make preparations now for the future.
An ageing population will also put immense pressure on public finances. On the revenue side, the tax base from salaries tax will become increasingly narrow because of the decrease in working population. At the same time, expenditures closely related to the elderly, such as medical, long-term care expenses and social security payments, will increase substantially. Therefore, we must endeavour to enhance productivity, control expenditure and invest today in measures that will help to mitigate future pressures on public finance.