Year of the Dog needs a budget for underdogs

Peter Mann asks why we depend so heavily on property sales for revenue, yet restrict these funds to capital projects when young and old cry out for support

With Hong Kong’s fiscal reserves amounting to trillions of dollars, surely it is time to give back some of those goodies to the elderly and ordinary people whose hard work over the years has made the city what it is today.

I do not mean the simplistic expedient of indiscriminately handing out a few thousand dollars to all and sundry, with migrants flying in from London and Toronto for a quick holiday to collect the hand-out. What Hong Kong needs are enlightened, long-sighted financial policies to help the struggling elderly enjoy their twilight years, and frustrated youth to find better jobs, or create their own through carefully vetted startups. The young also need to be given the hope of one day owning their own homes. With a new chief executive and fresh administration, now is a golden opportunity to start ironing out the structural imbalances of public accounts.

For a start, what is stopping the government from revising its outdated policy of overreliance on revenue from land-related sources, which constitute about half the government’s income, and restricting this revenue to funding capital projects only rather than topping up recurrent expenditure on education, health and welfare? Also, when will officials devise a better system of estimating the annual surplus, which has been consistently wide of the mark, when they have all the relevant information before them? This would also let them plan spending properly rather than just stuffing the extra cash into reserves.

We know the government tends to restrict land sales and keep prices high to extract maximum income. So far it has failed to come up with alternative taxation methods. A goods and services tax is the simplest but appears to be regarded as politically unacceptable. It has been suggested developers only be required to pay a proportion of the land price upfront, with the rest paid as annual ground rent which would make property cheaper but would not rule out the possibility of default. Land speculation also raises prices, with a prime site at Kai Tak recently sold on after a short time to another developer at a handsome profit. How about a tax on the city’s estimated 200,000 unoccupied properties? Or increased taxes on private motorists (9 percent of the population)?

It is hard to believe the government could remove tax breaks on electric cars, although it is said that a progressive society is one where even the rich take public transport.

More money should surely be spent on the elderly. They deserve a basic pension and much better oldage homes, the majority of which are substandard and depressing, and a more realistic immigration policy to admit suitably trained people from the mainland and overseas to staff them. The Social Welfare Department should supervise these homes more strictly and ensure a higher standard of service. Shame on us, a rich city, for letting old people suffer in their twilight years.

Our youth constantly complain that they can’t seem to find decent jobs and despair of ever being able to buy their own homes. The government has already introduced a scheme to assist first-time homebuyers but some think this might be counter-productive if a perfect storm of increased interest rates and oversupply leads to a downturn in the property market. The narrow base of our economy — now limited to financial services, tourism, trading and logistics, and professional services — must be substantially expanded to capture the diverse talents of our young workers and new graduates.

Is this state of affairs a product of our unimaginative educational system with its outdated emphasis on learning by rote and exams? This calcified system needs to be shaken up to develop in tandem with cutting-edge advances in the workplace which value creativity and innovative thinking.

Another area where the city’s riches should be spent is our degraded natural environment. We have the resources — either as incentives or through introduction of new technology — to improve air and water quality. In fact, we need to have a community-wide conversation over this increasingly pressing issue, not forgetting to include our power, transport and shipping industries.

We also clearly need to restrict the production, import and sale of plastic items which have become hazards to our physical and ecological health. Our attempts to recycle and cut domestic waste over the years have been a less than resounding successes, in contrast to achievements in some neighboring countries.

Successive financial secretaries have uttered the mantra of not increasing spending on manifestly inadequate services lest we need the money for a rainy day. It makes sense to keep some reserves for bad times but surely a more enlightened balance must be struck. A truly civilized city looks after its elderly and vulnerable, not just its rich. In the Year of the Dog, let’s agree to spend a bit more on the underdogs of our community.