Monitor
YOU CAN ALWAYS depend on our legislators to make grandiose claims of injustice in commercial and economic matters without supplying a shred of hard data to back it all up.
They were at it again on Wednesday, urging the Government to cut water and sewage charges and lean on the private utilities to make concessions in pricing of electricity and gas.
'We are begging them,' said independent unionist Leung Yiu-chung about the utilities. 'The truth is they have earned so much from the public in the past but now they just wouldn't care about us. It's so unfair.'
Tell us precisely what is so unfair, Mr Leung. Do you expect China Light and Hongkong Electric to invest hundreds of billions of dollars in new plant and equipment but supply electricity to us only at cost? Would you do it for no return? What do you think would be a fair rate of return and what would you base it on? Let's have some cold figures from you rather than hot air.
Similarly, we have Liberal Party chairman James Tien Pei-chun saying reductions are needed because people and businesses will continue facing financial difficulties next year.
Perhaps they will, Mr Tien, although nowhere near as many difficulties as in some of our neighbouring economies, but if you want a prescription for making their difficulties truly enormous nothing would better fit the bill than discouraging investment in electricity production. Go ask your counterparts in the Philippines what happened when they took that route.
And if we do not pay the true cost of our water through usage charges we will just have to pay it through taxes. Could you explain to us, please, how taking the money out of one pocket instead of another makes us any better off.
Your colleague in Legco, Fred Li Wah-ming, has an answer to this dilemma of course. Just dip into our massive reserves for the money. Fine, Mr Li, if you can prove that our fiscal deficit is only a temporary phenomenon and we will not need to continue pulling down our reserves.
The evidence is growing, however, that we have a structural deficit and if we take the easy route out it will lead to placing us somewhere between Zaire and Zimbabwe, where we will fit in just fine in 10 years - no difference at all, a community of bankrupts.
Let's put just a little perspective on this discussion of utility charges. The chart shows you their long-term record, with figures taken from the consumer price index, all of them rebased to a value of 100 for January, 1981.
The top line in the chart represents water charges, high indeed and remaining unchanged for more than three years, while overall consumer prices - the second line in the chart - have come down. But if water costs are still above water prices then all we have is a good argument for privatising water supplies. For the moment we still have to cover that cost, be it out of one pocket or the other.
The third line represents Towngas charges and the line at the bottom represents electricity charges. Let's get it straight for these legislators. Overall consumer prices have risen 248 per cent since January 1981 but electricity prices have risen only 69 per cent.
Overcharged are we? Over to you, gentlemen. Overheated talk is more like it.
Graphic: jake30gbz
