Uneven distribution of wealth leads to low public confidence

PUBLISHED : Sunday, 13 July, 2008, 12:00am
UPDATED : Sunday, 13 July, 2008, 12:00am

I find it intriguing that people are so deeply concerned about Hong Kong's economy ('Public satisfaction with economy hits new low', July 3), even though the University of Hong Kong has forecast a 5 per cent growth of gross domestic product for the second half of the year.

Frankly, a moderate growth forecast of 5 per cent of GDP is really not bad for a developed economy such as Hong Kong. So why is public confidence so low? I would say that this is mainly because of the uneven distribution of income earned in our economy. GDP growth can only reflect the economic performance of society as a whole and does not reveal economic hardship suffered by many people in Hong Kong.

If you could do an analysis of composite accounts (savings deposits, investments, overdrafts, credit cards and mortgages) with banks - of individuals and companies - it would show there is still a substantial proportion of the population that is just surviving. In other words, the concentration of the society's wealth rests with only a small number of people and this is unhealthy.

Using taxation (in whatever form) as a tool for income distribution does not work in Hong Kong.

As inflation gets to work, it is the ordinary citizens who find themselves in dire straits, leaving only the rich to enjoy the benefits of GDP growth.

Therefore, I urge the government to drop its parochial way of thinking regarding protection of the US-HK dollar peg.

It must come up with a new strategy and agree to spend a reasonable proportion of our exchange reserves and capital gains from land auctions in the following areas - education, health care, environmental protection and conservation.

The issue under discussion should not just be how much money should we spend. It is also important to make sure that the money is spent wisely.

We have to set out our priorities and ensure our reserves are spent on policies and projects which will benefit not only vested interests, but will help all members of society. Only in this way will confidence be restored in our government and in our economy.

Tsang Ka-yuen, Sheung Wan