Note to Albert Cheng: transport system has been subsidised enough

PUBLISHED : Sunday, 08 August, 2010, 12:00am
UPDATED : Sunday, 08 August, 2010, 12:00am

To resolve our city-wide transport problems, the government must take a broader approach by revising its policy and overall pricing to minimise the financial burden on the public and maximise our overall competitiveness. High transport costs are no different from high rents; they are a form of indirect tax. It benefits no one except a handful of big businesses

Albert Cheng King-hon

Opinion column,

SCMP, August 4

Albert, do me a favour, will you? Put your head between your hands and wrench it round with a big, hard twist. Done it? Is your head turned the right way again? Good.

I like your idea of raising tunnel tolls under the harbour to HK$25 a car. That would mean the Cross-Harbour Tunnel only, as the other two tunnels are already there or higher, but I like the idea because the Western Harbour Tunnel would then not need to raise its tolls.

It would get the extra revenue it needs from all the traffic that would move over from the Cross-Harbour Tunnel. The anomaly right now is not the western crossing's toll level but our government's refusal to raise Cross-Harbour Tunnel tolls from that ridiculously low HK$10 per car. This hugely distorts traffic flows across the harbour.

What I don't like about your idea, however, is the bit about how we should keep tolls on the western crossing down by subsidising that operation from the revenues of the Cross-Harbour Tunnel.

Subsidy, subsidy, subsidy, why is it always subsidy with you, Albert? If you think subsidies are truly the way to minimise financial burdens on the public, then why don't we go the whole way, put in a 100 per cent subsidy on tunnel tolls, and let everyone use those tunnels for free?

Let's take that a step further. Let's do it for all public transport with a 100 per cent subsidy for the buses, the Mass Transit Railway, the ferries, even the taxis. Everyone gets to ride everywhere for free.

And why stop there? Food is more important than transport. Let's have a 100 per cent subsidy on all foodstuffs. Let's do it for housing, too. In the future, no-one will have to pay rent or to buy a home. Let's make everything free, paid for by government subsidy.

Albert, have you ever stopped to think where we get the money for subsidies from?

I grant you that high rents can be seen in part as a form of indirect tax. Our government derives substantial revenue from our peculiar land-tenure system and this is undoubtedly reflected in rent levels.

But the same cannot be said of transport costs. These reflect hard realities like the cost of equipment, fuel, maintenance, operators' wages and a reasonable return for the investors who took the risk and trouble of creating the service.

We struggle sometimes with how we should set fares for these services and the present system of basing bus fares on the general level of inflation and the increase in transport workers' compensation is far from a satisfactory one.

But by no means has it resulted in outrageous fare levels. Our public transport fares are low, sometimes very low by international standards. Go take a ride on the London Underground and see how much more it costs you for any given distance than does the MTR.

One reason is that we already have heavy subsidies of public transport. The MTR Corporation gets sweetheart deals on public land, without which it could not build its lines, and the buses use public roads for free and burn subsidised fuel.

It may be true that one or two of our better-connected tunnel companies pulled the wool over the eyes of arbitrators to secure higher returns from our government than they should have been given. Equally, some other tunnel operators regret that they ever got into the business.

But, overall, Albert, it simply is not true that our transport costs benefit no-one except a handful of big businesses. All of Hong Kong has the benefit of one of the world's best and lowest-cost public transport systems. Big business does not see much money from it at all.

And subsidising it further would not minimise the financial burden on the public. We would still have to pay. The only difference is that we would pay out of a pocket marked 'my taxes' rather than one marked 'my own money'.

In fact, more subsidies would make things worse, encouraging people to live further out of town than makes economic sense, thus introducing inefficiencies to public transport. How would this improve our overall competitiveness?

Albert, before you talk anything involving money and society in the future, please give your head that wrenching turn, to take it out of talk-show host/legislator mode.