Halt the government gravy train

SCMP November 3


Everyone is agreed. The Hong Kong government and related institutions need to be more transparent and accountable. And the budget deficit needs to be slashed, preferably rather faster than Financial Secretary Henry Tang Ying-yen, according to his latest forecasts, thinks likely.
Here are some thoughts which address all these issues at once. Let us start with a matter close to the heart and fortunes of Mr Tang himself - and also of fellow son-of-Shanghainese-textile-magnate, Liberal Party luminary and former executive councillor, James Tien Pei-chun.

One public asset which never appears anywhere in the government accounts or balance sheet is that obscure little matter of textile quotas. They belong to Hong Kong under the terms of the Multi-Fibre Arrangement (MFA), negotiated under the General Agreement on Tariffs and Trade (now WTO) auspices. They have value - a large one. But they are handed out free on the basis of claimed "past performance", a thinly veiled scheme by which some old-established players make a handsome living by farming out quotas to those who do the work.

Most of that work is, of course, now done on the mainland - whatever the rules of origin may say - which means that Hong Kong workers are not getting the benefit of jobs. The mainland producers, their workers and the intermediaries are paying a tax to quota-sellers.

Would Mr Tang, Mr Tien and other ministers, together with executive and legislative councillors, please declare their interests in quotas which belong to Hong Kong at large, but which are distributed free. Would the auditor-general please investigate the process.

Indeed, one easy way for Mr Tang to reduce his budget deficit would be to auction the quotas to the manufacturers and traders best able to use them. Is that not what a market economy is supposed to be about? It would raise several times more than will be gathered by the racist tax of maids.

It may be that this would be closing the door after the horse has bolted. The MFA is due to end by 2005 and thus, in theory, quotas should cease to be of value. However, under the terms of its WTO admission, China will continue to face quotas in some markets. That will raise the issue of whether Hong Kong will then become a centre for quota evasion with "Made in (quota free) Hong Kong" labels continuing to be stuck on garments made across the border.

Could it be this fudging of rules of origin which is behind proposals to establish a tax-free zone at the Shenzhen border? If so, it could become yet another example of how the interests of Hong Kong at large are sacrificed to the political influence of those from older industries and utilities.

Indeed, instead of raking over the details of the Sars issue to find culprits, the Legislative Council should be delving into matters which are wrapped in a cosy conspiracy of silence. Legco is on the wrong track with Sars. As the inquiry showed, no individual was especially culpable. However, the system had serious failings. Ministers paid mega salaries need to take responsibility for systemic failures.

The lesson seems to be that once on the government gravy train, no one should be pushed off - unless their behaviour is so outrageous that 500,000 people take to the streets. And despite the budget problems, that train keeps getting longer.

Failures to curb spending and collect revenue are everywhere. Forget for a moment the control of land policy, and hence revenue, by Chief Executive Tung Chee-hwa's property developer cronies, whether or not they hand out post-retirement perks to obliging civil servants. Just look at the minor matter of why the Customs and Excise Department almost never enforces the duty-free limits which apply to Hong Kong residents. Could it be that the influence of the duty-free concessionaires or the airport authority exceeds that of the financial secretary?

Or look at the perks enjoyed by senior civil servants, already the most highly paid in the world. How many cars and drivers does the government employ to ferry them to meetings and dinners? How many car engines can be found idling away, polluting the atmosphere, waiting for some official, who could have taken a taxi or the MTR? It is extraordinary how lifetime civil servants, who have never taken a risk, expect to be pampered like tycoons.

The government will never succeed in convincing the public of the (real) need for higher taxes while the executive and administrative branches alike continue to feather their own nests, and those of their friends, so assiduously.



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