CYLeung: Promise of Change is Illusory

SCMP January 27 2013

If one cannot be bold when enjoying the advantage of being new to office, can one ever be? Leung Chun-ying has undermined the belief of many that he would be an agent of change.

His policy speech demonstrated not simply that time is needed to put some flesh on the bones of the promises in his election manifesto. It also showed a lack of willingness to grasp the nettle and the continuation of the tendency to use the words "consultation" and "consensus" as ways to avoid making enemies.

Take the small house policy, acknowledged even by Leung to be unsustainable. Although its abolition should play a central role in housing policy, any decision seems miles away. The administration surely knows enough about this situation and already has options for ending it. If not, what have the likes of Carrie Lam Cheng Yuet-ngor and the advisory boards been doing all these years? By failing to take on the Heung Yee Kuk, Leung is showing himself to be a wimp.

His resistance to real change is further indicated by his advisory appointments, such as to the Commission on Strategic Development. David Akers-Jones, the very man who as secretary for the New Territories was most responsible for the small house policy, is, in his 86th year, supposed to help guide the future. It would have been better for Hong Kong if he had done what senior British colonial officials were supposed to - get their noses out of local public affairs after retirement.

Another classic appointment to this body is Abraham Razack, the developers' man in the legislature who has straddled public and private roles in real estate. Intriguingly, Razack, as former chief executive of the Land Development Corporation (predecessor of the Urban Renewal Authority), is now backing Cheung Kong in its court battle with the URA.

Cheung Kong is alleged to owe the corporation HK$23 million. Cheung Kong boss Victor Li Tzar-kuoi was passionate in his defence of its refusal to pay it. But whatever the truth of Li's assertion, which is backed by Razack, it reveals a belief that the company could verbally renegotiate and seal with a handshake a written deal with the corporation that had gone sour for Cheung Kong.

As a public body, the corporation has no right to act against the public interest. The case reinforces perceptions of government/big business collusion.

The new Financial Services Development Council looks to be another assemblage of insiders who can be trusted either to just talk, or defend their existing interests. Mostly bankers or people linked to chairwoman Laura Cha Shih May-lung, this body has already aroused suspicion because of its apparent attempt to escape public scrutiny by being formed as a limited company not a statutory body.

The willingness to spend HK$10 billion subsidising the replacement of old diesel vehicles is commendable. But this required zero political courage and is a tiny amount compared with ongoing spending on unneeded polluting road tunnels and bridges. More telling is the requirement for ocean-going vessels to use low-sulphur fuel while in local waters. All major lines are equipped to do so as it is a requirement in other ports, and such a measure has long been supported by the Hong Kong Shipowners Association. Exempt are the major polluters - "local vessels" and "those plying exclusively within the river trade limits" who have the ear of the government.

It seems unlikely that Leung's land policy will have any significant impact over the next five or even 10 years in raising housing standards. If prices fall, that is likely to be because of rising interest rates, which could leave aspiring home buyers even worse off when median home prices are 13 times median salaries.

To achieve higher standards, Hong Kong needs affordability to rise sharply but that is not going to happen under Leung because so many interests are lined up against it: the government itself with its excess reliance on land revenue; the developers with their large land banks and expectation of high profits margins; the New Territories' landed aristocracy; the banks and Monetary Authority fearful of negative equity and loan defaults; and, last but not least, the many in the private sector who sit on large unrealised capital gains and do not need a bigger flat. Almost all decision-makers fit into these categories of vested interests.

There is a need to increase public housing for some specific groups, notably the elderly. But, otherwise, a policy that does as much to increase public as private housing simply increases the social divide.

In principle, Hong Kong is rich and old enough so that its public housing sector should be in continuous relative decline. But that is no longer the case and Leung's feeble efforts to be bold in addressing today's private housing supply delays the day when large numbers now in public housing can afford to buy. Blaming mainlanders is a red herring.

One could not expect Leung to fill in all the details of his plans at this stage. But he could have set several more finite goals with time frames attached. He appears a prisoner of his own background and a rocky start caused by the illegal structure issue has knocked the confidence out of him. But compromising with the obvious vested interests is no way to regain public respect.

ends