Hearing without listening

PUBLISHED : Saturday, 15 January, 2011, 12:00am
UPDATED : Saturday, 15 January, 2011, 12:00am

One of the almost certain outcomes of the current budget 'consultation' exercise is that the opinions collected will be ignored but that the government will think of new and exciting ways to confirm that the public's views have been carefully taken on board.

Moreover, there will be much talk of 'giveaways' and 'concessions', displaying wilful disregard of the fact that the recipients of this alleged generosity are the very people who paid for it in the first place.

To be fair, Financial Secretary John Tsang Chun-wah is using more imagination in trying to solicit public views this time round, but he has singularly failed to come clean on how the budget is actually constructed. The truth is that, by the time the consultation process kicks in, most of the major decisions about the budget will already have been taken.

Indeed, the composition of the budget presents a classic example of disjointed government. Every government department submits a wish list requiring funds; what follows is an intense period of internal bargaining, horse-trading and finally compromise.

The compromise could be said to be an outcome that satisfies the public interest, but it is nothing of the kind. It is, in fact, a delicate process of pacifying clashing egos, balancing bureaucratic priorities and, somewhere in all this, reaching a conclusion that offends the least number of people as opposed to satisfying the majority.

Political parties and various interest groups are also wheeled in and permitted to make grandstanding demands but, after being allowed to vent their views, they can safely be ignored.

The same indifference cannot be shown to the really powerful people in Hong Kong, the tycoon class, who need hardly wait for a formal budget consultation to make their demands known because they have a secure hotline connecting them to the people in power. It would be unfair to say that bureaucrats involved in the budget-making process come to the table with bad intentions; many of them genuinely desire to do their best for the public.

However, almost without exception, they have a morbid fear of long-term commitments because they are terrified of not knowing what the future holds and worry that they will be brought to account for developments beyond their control. This is why Hong Kong budgets are littered with one-off payments to the needy and short-term concessions for this and that.

Above all, the budget-makers love one-off projects which offer the prospect of legacy recognition and carry some certainty of outcome. Thus, if the choice is between building up a solid programme for sports development and splashing out on a big single event, such as staging the Asian Games, the bureaucrats will opt for the latter not least because the outcome is assured and simpler.

All the tough decisions, which at the end of the day are budgetary decisions, tend to be ducked. This includes such things as provision for the elderly, developing tertiary education outside the elite zone and even mundane but vital matters such as waste disposal. They are avoided by introducing a string of short-term expedients to paper over the cracks.

Meanwhile, insult is added to injury by constant talk of providing 'giveaways' to the public. Framing the issue in this way avoids admitting that what's involved is giving back money to the people who supplied the cash in the first place.

Even here, it is rare for the truth to emerge as there is much self-righteous talk of 'giveaways' only going to the poor who do not pay income tax. Were income tax the only source of government revenue, this would be justified.

But the fact is that the poor, alongside the rich, also pay the myriad of levies and other charges that produce government funds. The difference is that these payments account for a larger proportion of their incomes.

Moreover, the seriously rich in Hong Kong only loose a tiny proportion of their earnings to income tax because the law allows them to be remunerated in a number of ways that avoid direct taxation. Only the salaried middle class really bear the full burden of direct taxation.

So, let's have no more talk of government generosity, which mainly means giving back to the people what they used to own.

And maybe the bureaucrats who have developed a ferocious appetite for hoarding public funds, and placing billions of dollars in very low-yielding financial instruments, will come to understand that saving for a rainy day does not just mean creating one of the world's largest fiscal reserves, but also encompasses investment in people and infrastructure.

John Tsang is one of this administration's more outgoing leaders, maybe he can break the mould by raising the concept of public consultation from the level of mere propaganda to that of purpose.

Stephen Vines is a Hong Kong-based journalist and entrepreneur