Does Hong Kong really need so many obscure and antiquated ‘specialist’ bodies?
A top adviser to the Hong Kong government has warned that opposition lawmakers threatened the prospects of the city’s financial services industry if they refused to approve funding for the Financial Services Development Council SCMP, September 23
Trawl your way though the long list of government websites and eventually you come across something called the Productivity Council, created 50 years ago to help the manufacturing industries on which we then crucially relied.
Manufacturing in Hong Kong has long gone the way of the dinosaurs but yet the Productivity Council soldiers on with 650 people on staff, swallowing HK$214 million (US$27.4 million) of direct subsidies last year plus about another HK$100 million of indirect government payments.
They cannot even give us their mission right, defining productivity as “the effective use of innovation and resources to increase the value-added content of products and services”.
It suffices only if you add the words “as measured in output per unit of input” ... but this essential distinction is, of course, a mystery to bureaucrats.
Then you have the Productivity Council’s close counterpart, the Trade Development Council (TDC) established to help boost domestic exports, which were at the time the equivalent of 50 per cent of gross domestic product (now 1.7 per cent).
That’s right. Domestic exports, mostly trinket jewellery, are now the equivalent of only 1.7 per cent of GDP. Yet a swollen TDC still took in HK$390 million from the public purse last year to promote mainland exports as a substitute, and to thrash about looking for anything else it could do to justify its existence.
They know how false it is. Just this week we had TDC executive director, Margaret Fong Shun-man, in London, trumpeting that Hong Kong did HK$648.7 billion of trade with the European Union last year.
Yes, Margaret, but this figure is for total trade, 99 per cent of which is re-exports that no one here even touches on the way from the mainland to our port.
Re-exports are our way of accommodating tax evasion in the mainland. Pick up your microscope and tell us instead about domestic exports to the EU.
And now Laura Cha Shih May-lung, chairwoman of the Financial Services Development Council (FSDC), says our financial services face ruin (Oh, woe is us) unless legislators throw away good money to turn the FSDC into another such public sector wastrel that will long outlive its sell-by date.
The FSDC was the brainchild of our former Chief Executive Leung Chun-ying, a property agent who did not really know what he was about in much else.
All this was supposed to be was an occasional talking shop, between high-ranking individuals from the financial services sector and the professions.
But check out the list of FSDC committee members on its website – and bear in mind we have already installed lobbyists for the banking, accountancy, broking, insurance and the legal sectors as lawmakers through the functional constituency seats in the Legislative Council – and it begs the question: “Do we really need to have another expensive, tycoon-biased, government-funded body, proffering advice to administration officials?”
If any senior government secretary wants community advice on anything from finance to fishing he has to do no more than pick up the phone and the best told people in that sector will be sitting in his office that same afternoon. Anyone would do it. People regard a call like that as a public obligation.
But now take the recent FSDC crowing about how it had highlighted a taxation anomaly that might discourage private equity investment in Hong Kong start-ups.
It seems, in fact, to have been pointed out by someone at accountants PwC, and then taken up by the FSDC.
Is it now the case then, that a big reputable financial services firm like PwC has no way of letting the Financial Secretary know of a flaw in the system without the endorsement of the FSDC?
That would be a flaw in itself. We don’t need another TDC.