Landlords, kuk, rural groups will cream off ferry subsidies

PUBLISHED : Thursday, 22 April, 2010, 12:00am
UPDATED : Thursday, 22 April, 2010, 12:00am

The spokeswoman said the bureau strived to strike the best balance between the principle of non-intervention in private business and the interests of island residents. 'Unlike other commuters, islanders have no other option but ferries, and without assistance, this business is simply financially unviable,' she said.

SCMP, April 20

Teacher, teacher, I have my hand up, look at me. I know a way of making these outlying island ferry services financially viable without providing any government assistance at all. What you do is let them put their passenger fares up.

It's a particularly good idea because, if you are right, madam, that, unlike other commuters, these islanders have no option but ferries, then they will just have to pay up or never commute to work in town at all. Thus, the ferry companies won't have to worry that passenger numbers might come down if fares go up. They have those passengers trapped. Great idea, isn't it?

OK, OK, the islanders may whinge about it a little but, frankly, by far the most of those whingers come from Discovery Bay, which is really little more than a colony of the Netherlands these days, and the Dutch are well known as the greatest whingers in Europe, even worse than the Scots that way.

Let me declare myself. Back in the 1980s, when I was at the bottom of the ladder in the stockbroking business and a bear market rendered bonuses an impossible dream, we lived for six years on Cheung Chau. I loved it and would have stayed except that my wife insisted we weren't going to put the kids into fish school.

And while there were also whingers on Cheung Chau, I can't recall many complaints about ferry fares. They were a cost of living there. You paid that cost to get a rock-bottom cost of living on everything else, including the beer on that ferry - the formaldehyde brand but, hey, it was cheap.

I do not believe that things have changed much. Admittedly, income polarity has worsened in Hong Kong since that time, which would tend to make islanders a little poorer relative to town dwellers, while rising oil prices have hit ferries harder than other forms of transport. It may thus be true that some commuters feel the sting more than they did when I lived in Cheung Chau.

But I doubt that the Transport and Housing Bureau's proposal to spend up to HK$120 million on subsidising fares will alleviate matters. The reason for this is that I know island landlords, and they have a very keen appreciation of just how much their tenants can pay.

If government makes the commute to town cheaper by HK$100 a month, then this is the amount by which those landlords will raise their rents. If you don't believe me, just put it to the test. And what the landlords leave on the table, the Heung Yee Kuk and the rural committees will soon find ways to scoop off.

We are looking here at the law of unintended consequences. When you tinker with economic arrangements, you only infrequently get the result you intended to create, and you never get only that result. Island living has its own dynamics. Adding sugar to the island dinner pot will only attract fruit flies.

But even the official tinkering isn't straightforward. The holder of the transport functional constituency seat, Miriam Lau Kin-yee, is unhappy that the government has built no extra retail floor space at ferry piers. She says ferry operators could have boosted their income that way.

What you need to understand about Ms Lau's position is that ferry companies and associations account for 10 of the 178 voters in the transport functional constituency. This is not a huge proportion of the constituency's voters but is hefty enough to stop Ms Lau from defining her public too widely.

Listen, Miriam, if my tax money is to go to building shops at ferry piers, then I want the rental income from those shops (full market rents, please) to go back to the public purse. It's my money and I can think of better uses for it than steering it into the pockets of island dignitaries, roundabout though the route there may be.

The line I like best, however, is that one from the bureau spokeswoman about striving to strike the best balance between the principle of non-intervention in private business and the interests of ... uhhh ... public housing tenants yesterday and flower stall keepers tomorrow ... but today, hmmmm ... let's see ... yes ... island residents, yes, that's it, that's the one today.

Why don't you give up, madam. There is no principle in this town of non-intervention in private business. There may have been one long, long ago, but it's long dead and buried.