Hypocrisy dwells in a housing scandal
SCMP January 8 2007
For hypocrisy, the senior bureaucracy and the judiciary excel. Spare
a thought for former music academic Chan Wing-wah, sentenced to community
condemned for "greed" by a judge who is in a position to enjoy income
advantages similar to those for which he condemned Chan. Indeed, instead of
expressing outrage at Chan, members of the judiciary should be asking why they,
among others, are granted outrageous tax breaks that suddenly become "illegal" when
an irrelevant, fine line is crossed.
Chan's crime was to "cheat" Chinese University, where he was an associate
dean of the arts faculty, out of HK$1.9 million by claiming a rental allowance
while occupying a flat in which he had a partial interest. This was in contravention
of a rule that allowances could not be claimed on properties in which a claimant
or relative had an interest.
Chan was certainly either stupid or ignorant. If he had had any sense
he would - like 90 per cent of the senior bureaucrats, judges and
academics who qualify for housing allowances - have leased his own
flat to a third party and rented a nearby flat at a similar rent.
Chan was entitled to a housing allowance. The "cheating" part
is mere cover for the bureaucracy's attempt to obscure its own greed
by pretending that allowances should not go to those owning their
The question that should be asked of every judge, senior bureaucrat
and senior academic in receipt of a housing allowance is this: how
many flats in Hong Kong do you own? If any, why should you be entitled
to a housing allowance?
The existence of these housing allowances also highlights another
- the chief beneficiaries of which are these self-same senior bureaucrats,
judges and academics. When an employee is reimbursed by his employer
for housing costs, this payment is judged for tax purposes to represent
only 10 per cent of that person's income. In most cases that is an
absurd fiction. In practice, rental allowances run at 30 to 50 per
cent of salaries. The same principle applies to quarters provided directly
by the employer. In the case of the government, this amounts to tens
of thousands of people. While many are middle- and lower-income people
like policemen - for whom there is little or no tax benefit - there
are huge benefits for the already overpaid, upper-echelon civil servants.
If Financial Secretary Henry Tang Ying-yen were really serious about
broadening the tax base, he would start by ending the system whereby
big benefits in kind - principally housing - are taxed at derisory
rates, if at all. But of course his fat-cat bureaucrats would resist.
This incident also points out how much time the Independent Commission
Against Corruption wastes on petty cases. Chan's "offence" dates
back 16 years, and he repaid the university in 1996. Putting so much
effort into marginal cases helps explain why the ICAC has almost zero
success in tackling big-money corruption involving the public sector,
particularly relating to land and buildings. This is not surprising
now that the ICAC is headed by civil servants still anxious for promotion
in a system that is highly self-protective, and has ever-closer links
with local cartels.
The Chan episode is also a reminder of the cavalier way in which the
leadership disposes of public assets. When he was chief executive,
Tung Chee-hwa did not deign to stay at Government House, preferring
his own apartment. But now that he has no official function, he is
being provided with the entire, historic Kennedy Road colonial building
as his office.
One can forgive his blundering as chief executive. But does he have
no shame, no sense of propriety? Perhaps the current chief executive
could tell us the assessed rent for this building, and whether its
use will be included in Mr Tung's next tax return.
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