A new bus route

PUBLISHED : Saturday, 18 December, 2010, 12:00am
UPDATED : Saturday, 18 December, 2010, 12:00am

The government is expanding its transport subsidy scheme to benefit more low-income earners, covering all 18 districts instead of just four. The means test will be based on family income and assets rather than those of individuals. It is expected to cost the government about HK$1.3 billion per year and benefit about 165,000 families.

Coincidentally, the Democratic Alliance for the Betterment and Progress of Hong Kong (DAB) has proposed a series of economic development and relief measures. One proposal is to set up a HK$30 billion transport fund to ease inflation and help people who are weighed down by rising costs of living. The DAB is concerned that the government's planned Work Incentive Transport Subsidy Scheme may not benefit all grass-roots citizens.

Both proposals are well intentioned but they are not the best or most practical solutions. One common problem is that both groups fail to think outside the box and are too bogged down by the principles of a free-market economy. The conventional line of thinking is that the public transport system should be operated by the private sector and, when charges go up, the government needs to step in to help through subsidies. The concept is flawed because it's too passive, allowing the transport providers to do whatever they want.

Housing and transport are costly in Hong Kong. More than half the population lives in public housing and about a million own their properties. So, some 70 per cent of citizens do not have to worry about housing. But, for those living in remote areas, travel expenses can be almost unbearable - in some cases costing a family of four more than the monthly rent for a public housing unit. These costs have a more serious impact on people's livelihoods than anything else.

Instead of taking a piecemeal approach or tackling the issue through subsidies, the best way forward is to nationalise some of the main transport services.

One of the most practical solutions is to buy up the franchises of the main bus companies. The least the government should do is follow the business arrangements it has with the MTR Corporation, under which it has a controlling stake in the company. This way, the government could control and stabilise fares.

Like high land premiums and exorbitant rents, high transport costs are also a form of indirect tax. They affect most citizens but benefit only a few capitalists, who often get a guaranteed return on investment.

There would be countless benefits if the government could nationalise the bus companies and keep transport costs at a reasonable level. It could reduce the financial burden for the public and minimise overlapping bus routes, easing congestion and reducing roadside pollution. In a nutshell, it would benefit not only individuals but society as a whole by enhancing our competitiveness as an international financial centre.

By rough estimation, buying up the relevant bus operations of the city's three bus companies - NWS Transport Services, Transport International Holdings and RoadShow Holdings - would cost somewhere around HK$10 billion.

This would be far less expensive than setting up the transport fund proposed by the DAB, but the overall benefits would be much greater and more sustainable.

The government would also no longer need to subsidise bus companies with diesel tax exemptions. Furthermore, running these bus firms would earn a stable income and lessen the financial burden on public coffers.

This proposal may differ from our policy principle of 'big market, small government', but we should not forget that mass transport systems are not oriented towards profit in most cities.

Great leaders not only lead but often leave behind a legacy. Lord MacLehose's legacy was his housing policy; Chris Patten gave people hope for democracy. Chief Executive Donald Tsang Yam-kuen could be remembered for bestowing stability on Hong Kong by restructuring the transport system.

Albert Cheng King-hon is a political commentator