Taxman adds to our embarrassing riches
The inability to make accurate forecasts must be a key qualification to work as a top government official. This is the impression you get from listening to people like Chu Yam-yuen, the city's top taxman. This week, Chu announced that his department had collected a record HK$238.3 billion in 2011-12, 14 per cent up from the record set in the preceding year.
We hate to spoil his good mood by reminding him that a year ago he was forecasting tax revenue of HK$201 billion, a 4 per cent drop. An incorrect forecast of more than 18 per cent would have landed any financial officer from the private sector in serious trouble.
To be fair, Chu is only taking after his boss, the financial secretary. Since his appointment in 2007, John Tsang Chun-wah has never managed to produce a single accurate budget forecast. As a rule, he predicts a small deficit that turns into a massive surplus. He truly gives a new meaning to the phrase 'embarrassment of riches'.
Last year, he forecast an HK$8.5 billion deficit for 2011-12. In February he revised his forecast - to a surplus of HK$67 billion. In the end, the surplus was HK$73.7 billion - HK$6.7 billion more than his revision of less than two months earlier. By one calculation, Tsang's initial budget estimates since 2007 have been wrong by an astonishing average of HK$63 billion.
Don't get me wrong. I have nothing against high tax revenue and budget surpluses. But I am against officials like Tsang and Chu who think nothing of making wrong estimates. You can throw fiscal planning out of the window if you can't even make accurate forecasts of earnings year by year. Worse, when you predict a deficit in deficit-averse Hong Kong, you are using it as an argument to silence sectors of society demanding greater government support to improve people's livelihood.
Instead of formulating sustainable plans to improve the city's quality of life and make it more attractive and competitive, officials like Tsang, bankrupt of ideas, specialise in giving out one-off charity handouts like the HK$6,000 tip for every Hong Kong resident, rich or poor alike. The scary thing is, Tsang is expected to keep his job in the new government.