Whines worth bottling but budget will disappoint again
Any reduction in duty and tax levels is likely to have a beneficial effect on the [wine] market
Christie's wine salesman
The end of the begging season is almost upon us, heavens be thanked. Just one more day and all those wheedling industry associations that for months have pushed out their begging bowls will have to give up. It's pointless after the budget has been read.
My favourite one recently was a restaurant owners association that pleaded for subsidies of some form because times are tough what with food prices going up and low unemployment rates making poorly paid staff hard to find.
Sing it with feeling, boys. Haul out the fiddles. But, while you're dabbing the tears from your eyes, could you also wipe the grease off your chins?
Leaving aside that restaurants are enjoying boom times with receipts growing on average by more than 15 per cent a year, did I hear any offer from you people to share your earnings with the public purse when food prices were falling and unemployment was high? If we taxpayers didn't hear it then, well, let me tell you that we're deaf now, too.
Likewise, this fellow from Christie's, whom I quoted above. I have news for you, Mr Elswood. It is true of all economic activities that any reduction in duty and tax levels on them has a beneficial effect on them. Please tell me then why wine should be granted a privileged status over petrol or football betting.
And if it is your pitch, Sir, that we could hold wine auctions here if we had no alcohol duties, could you please provide me with projections on just how much this would improve the living circumstances of ordinary Hong Kong people? I shall bring my own microscope to review what you show me.
I like my glass of wine with dinner, too, but I also understand the Hong Kong compact in these matters. If you live in a shoebox, eat rice, drink tea and ride the bus you escape the taxman. If you want to live the wealthy western lifestyle, you get stung. I thought everyone understood this.
Fortunately, even if Financial Secretary John Tsang Chun-wah were an easy mark for all the smooth-tongued shills who come his way, he hasn't been left much to give them.
His budget was stolen from him by his boss, Chief Executive Donald Tsang Yam-kuen, who delivered the real budget in October, disguised as a policy address. Donald has a stable of functional constituencies to maintain and needed to rope off the tens of billions of dollars worth of pork barrel contracts they demanded.
He then left his underling instructions to do nice things for poor people with what was left of the budget and otherwise not get too adventurous.
We now have the usual series of budget leaks in the week before budget day and they are certainly best characterised as not too adventurous. Our front page yesterday, for instance, led on the leak that the elderly will get a one-off oldies bonus but no increase in old-age allowance. It was considered but then dropped because it was just too big a step to take. And that's why they call him John the Timid.
What a shame. Here we are with a fiscal surplus running in December at HK$138 billion a year or 8.7 per cent of gross domestic product. It is probably even higher now and this is on a cash basis. On an accruals accounts basis the figure is probably over 10 per cent of GDP.
Meanwhile, our fiscal savings have risen to HK$1.08 trillion or the equivalent of 68 per cent of GDP, which is an enormous figure. It is far in excess of anything required to offset future fiscal deficits. The biggest annual fiscal deficit we ever ran came to only 4.9 per cent of GDP. We have savings enough to run 14 of these consecutively before even going into debt.
The two Tsangs have an opportunity here to do something with this year's budget, which could make the whole world sit up and take notice, something at the level of abolishing personal income tax or setting up a universal medical plan fully funded by fiscal savings.
You can count on it that it will be an opportunity missed.