Budget must watch out for Hong Kong's middle class
Philip Yeung calls for budget measures that help struggling families with education and rent
Once upon a time, Hong Kong was more than a city. It is an idea, beloved by all who believe in a fair existential struggle. Hard work used to beget honest reward. Now, this fabled town of bootstrap optimism resembles a dog-eat-dog compound.
We have become a pear-shaped society, with a swollen lower class and a shrinking middle class, the former trapped by impotent rage and the latter resigned to their fate in which the Hong Kong dream is receding from their reach.
Next Wednesday, the financial secretary will unveil another budget. Few expect him to redress the social ills. I, for one, have never understood why homeowners, who have grown fat from skyrocketing property prices and perennially low interest rates, still enjoy two distinct tax advantages over renters: tax-deductible mortgage interest payments, and rate rebates, while millions of renters who are at the mercy of gouging landlords get nothing.
It is wrong to use property as the base for tax rebates or deductions, as there are many owners of multiple properties. It is ethically indefensible to reward and encourage property speculators in a city with an acute housing shortage.
One measure open to the government to cool the speculation craze is to levy a rates surcharge on multiple property ownership. The idea of a rental rebate has been shot down by the financial secretary for fear of fraud, that is, the use of fake rent receipts. But what about an accommodation subsidy, applicable to all citizens with taxable income? This would eliminate indiscriminately lavishing public money on owners of multiple properties. The benefit would only go to individual taxpayers per filing, without requiring proof of rent receipts.
Since the handover, the middle class has seen its base systematically eroded by foolish policies. We have only two avenues for upward social mobility: entrepreneurship and education. The first is out because of sky-high rent; the second is no longer offering a level playing field.
Without broad consultation, the Education Bureau foisted the Direct Subsidy Scheme on us before the handover, and this unfair system has persisted. This is apparently a reward of financial freedom and academic autonomy for schools that are well-run. But the big problem is that these schools are fee-charging institutions, some with fees of up to HK$98,000 per year.