Pouring loads of concrete holds little benefit for HK

PUBLISHED : Thursday, 27 January, 2011, 12:00am
UPDATED : Thursday, 27 January, 2011, 12:00am

Pay rises of up to 50pc to lure more youngsters into construction

SCMP headline, January 25

It's a terrific deal, according to one of those Carrie women in senior government positions (can't remember which one), as the money won't come out of taxpayer's funds and we will rid ourselves of the need to bring in foreign labour.

Yes indeed, and last night I told the tooth fairy, get me a new Maserati for my birthday. Whoopee! I can hardly wait.

The construction industry will bear the cost of this big push on wages, we are told, and construction companies would, of course, never dream of passing on their costs. It is just an accident that the cost of construction has risen 55 per cent over the last seven years, a period during which the overall deflator for the rest of the economy actually went down.

Pure mishap, that's all, and, should this mishap happen again, well, we can always play the game of saying that capital spending comes from the capital works reserve fund, which is meant to be funded by capital revenue and capital revenue is not actually tax, not technically anyway.

Look it up yourself at www.gov.hk and you'll realise that the government's how-to-handle-publicity rulebook states that when you want to skin a taxpayer you don't call it tax. We taxpayers are all stupid, you see.

Let's put the construction industry in perspective. Back in the early 1980s it accounted for more than 30 per cent of gross domestic product. The figure is now 7.6 per cent, which, as the second chart shows, is even less than it is now in Britain.

There is actually nothing extraordinary about this. It used to be said that Britain had much lower construction spending because Britain had already long built its infrastructure while Hong Kong's was a developing economy and still needed to get over this phase of economic growth.

Well, it has done so. Look at the almost cancerous spread of new roads, railways, bridges and tunnels all over Kowloon and the New Territories, more than we will need for a long time. We have also housed all our squatters now and our buildings are newer than in any of Britain's dilapidated cities. It's Britain that may have to play catch-up now.

This doesn't satisfy our Donald, however. He is required under the terms of his appointment by Beijing to pour a certain amount of concrete annually and every year this figure goes up. Pouring concrete is also the best way of keeping the functional constituencies happy and onside.

Thus he speaks of coming big new infrastructure spending and of the construction industry's need to gear up for it by training larger numbers of skilled workers.

Yet he hasn't stirred up any enthusiasm for joining the trade despite big government training subsidies and good wages. You'd think people would line up to become bar benders at HK$1,150 a day on public projects, the highest wage in the construction industry, but still there is a big shortfall.

It's an old man's line of work, predominantly male, much older than the average of the work force and steadily dwindling in number. Hong Kong people just don't see themselves any longer walking around construction sites in those cheap white rice shoes and grimy clothes. They don't like the work and, despite what Donald says, they don't like the prospects.

In fact, even labour migrants from across the border tend to shun the construction industry these days. Walk past any construction site and you can see that the labour is increasingly South Asian these days.

So there goes all that talk about how infrastructure spending is a good thing because it will create jobs. It will create them for foreign labour. Most of the construction materials, the biggest single category of spending, are also sourced abroad and the main contractors on big infrastructure projects are foreign firms. Where is that boost for the Hong Kong economy?

Meanwhile costs continue to rise astronomically on new transport projects, from HK$15 billion to more than HK$67 billion for that unnecessary high speed rail link to the border. Even the projected costs for that marginal Sha Tin to Central link are now over HK$60 billion.

Give it up, Carrie. You're living in the past.