My Take

Reserve your criticism of financial secretary John Tsang

PUBLISHED : Wednesday, 31 July, 2013, 12:00am
UPDATED : Wednesday, 31 July, 2013, 4:23am

One tycoon attacks finance chief John Tsang Chun-wah for being "a sinner". Two other rich guys rush to his defence. It's all very distracting but it does help the public to gauge who's in whose camp in our ever-shifting plutocratic landscape.

The real argument should not be about Tsang, but how high our public reserves should be and how the money ought to be used to make Hong Kong a better place. And to further such worthy goals, whether, horror of horrors to officials like Tsang, occasional deficits may be justified. OK, I know the Basic Law stipulates a balanced government budget, but it's so vaguely worded, like so many of its key provisions such as those on full democracy, that you can make it mean anything you want. One simple interpretation is that it only bars recurrent deficits over an unspecified period, not occasional ones.

But we never hold such a substantive public debate because we do not have a fully elected government, and also because we prefer to attack officials rather than address policies.

Rest assured such a debate on how to spend will happen when Hong Kong achieves full suffrage and elected politicians will need to buy votes with public money.

The government is now sitting on some HK$700 billion in fiscal reserves. This does not count the Monetary Authority's exchange fund and myriad other government liquid assets. So there is plenty to spend.

The beauty of Hong Kong's official finances is that they involve two key but no-brainer jobs. The US-HK dollar peg parcels out monetary policy to the US Federal Reserve. By maintaining a high land premium (when the government owns all the land) and sky-high stamp duties - raised even higher to crack down on property speculation - the government is guaranteed healthy revenues. That is, incidentally, one reason why we often criticise, fairly or not, Tsang and HKMA chief Norman Chan Tak-lam: why do we pay private-sector-level money to people for fairly mechanical jobs?

If you are optimistic that full democracy will come fairly soon, you should stop criticising Tsang and hope he keeps the reserves for a few more years. Our future leaders will surely use them up quickly. Let's hope they use them wisely.