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Jake's View
PUBLISHED : Sunday, 18 August, 2013, 12:00am
UPDATED : Sunday, 18 August, 2013, 2:46am

Business is city's biggest welfare recipient


Jake van der Kamp is a native of the Netherlands, a Canadian citizen, and a longtime Hong Kong resident. He started as a South China Morning Post business reporter in 1978, soon made a career change to investment analyst and returned to the newspaper in 1998 as a financial columnist.

[Federation of Hong Kong Industries chairman Stanley Lau Chin-ho] said that only by sending its own representatives to Legco could the business sector truly express its views.

"It is very hard for businessmen to run in a direct election, as they do not support welfarism, which attracts votes," he told the South China Morning Post.

South China Morning Post,
August 15

I have my reservations about giving names that end in ism to abstract concepts. Too often they indicate that the speaker does not like something but has not thought about it closely enough to give it an exact definition.

Perhaps Mr Lau knows exactly what he means by "welfarism", but he did not grace us with this knowledge and all I can do is fall back on the dictionary, which defines welfarism as the principles or policies associated with a welfare state.

The dictionary also defines welfare state but we won't bother. I ask you only to imagine what would be the result in this town of a referendum that poses the question: "Do you favour the adoption of a welfare state?"

Yes, I know that you can say we already have one with half the population in public housing (whether rented or bought), effectively free medical care, free education and HK$46 billion a year spent on social welfare.

But I also think I know my Hong Kong middle class. What this referendum will actually be taken as asking is: "Do you think people should leech from others rather than working hard to make their own living?"

So if Mr Lau says welfarism attracts votes from the general public, well, I would like to see him try. There are undoubtedly some accomplished singers in this town of The world owes me a living but they are a minority, and he would appeal to most of the general public in vain.

I speak of the general public, however, because one sector of it does actually believe in welfare. This sector believes government has an unvarying obligation to relieve its members of disadvantageous conditions. It also sees nothing wrong in leeching all it can get from government.

I refer, of course, to the business sector.

I have yet to find the businessman who objects to a rigged market if that market is rigged in his favour. Invariably he finds reasons to argue that it is done in the public good and should be continued.

I have also yet to find the businessman who thinks that government hand-outs and contracts in his industry are not always a good idea. They are happy welfare recipients, every one of them. They like their money to come easy. The last thing a real capitalist wants is capitalism.

What is more, they have not only been given extra votes in what passes for elections, but a big chunk of the Legislative Council is carved out for these extra votes as functional constituency seats. Instead of resisting industry lobbies, our system encourages them.

The idea was that Legco would do its work better if it had direct advice from representatives of all walks of industry, which entirely ignores the fact that people have always been happy to offer Legco their advice without sitting on it. Someone got advice and influence mixed up.

The result is that we now have a legislature largely composed of barristers, who plague such assemblies everywhere with their conceit that courtroom argument and public policy are identical, plus industry lobbyists who horse-trade their votes to squeeze out more public money their way.

This is usually done through lucrative big infrastructure projects, whether needed or not (mostly not in recent years), and restrictive trade practices, which the barristers in particular rely on but all the other functional constituencies relish as well.

Mr Lau is entirely right in saying that it is very hard for businessmen to run in a direct election. The reason, however, is not that they spurn welfarism but that they practice it and that the electorate recognises this.

The biggest single reason that the concept of functional constituencies is seriously flawed is that it fosters greater disbursements of corporate welfare than single mums and indigent oldies have ever taken in personal welfare.



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Let's not forget that public housing, transport allowances and nearly free medical care are all indirect subsidies so the tycoons can pay less than subsistence wages.
John Adams
I agree with you Mr van der Kamp.
Put FHKI alongside REDA as among the most insidious leeches this SAR has ever spawned.
But in fairness, aside from "big business" there are tens of thousands of what you might call "middle-class" companies : small and medium-sided industry / service industry / China trade etc who don't want and certainly don't need any govt special benefits. They just want a level playing field and access to HK's golden egg of hard-working, intelligent, law-abiding middle-class people, plus the rule of law and the ICAC.
These "middle class" companies don't belong to windbag business associations like FHKI (what a waste of money on membership fees !) and they certainly don't belong to REDA.
But they do register in HK (not in the BVI or whatever off-shore base to avoid tax) so they do pay their full share of HK profit taxes.
Yet they have no voice in LEGCO : never had, never will.
John Adams
Mr van der Kamp : As an after-thought, you may care to research the effective % rate that HK's big companies ( e.g. those that belong to FHKI and REDA) pay in profit tax , bearing in mind all their off-shore and tax- free haven registrations. I guess this should be available from their annual reports if they are listed companies.
Then compare that with the "middle class" companies I mentioned before who pay their full whack of profit tax @ 16.5% ( as do middle class wage-earners who don't go in for complicated tax-avoidance schemes and thus pay the full whack).
If - as I suspect - many of our biggest Hongs effectively only pay much less than 10% in profit tax one wonders whether they should have any vote at all in LEGCO.
This would be a very interesting statistic, especially if you then factor in hidden benefits e.g. the super low landing fees at HKIA from which CX benefits and the benefits that rpasea mentions etc , and whatever hidden subsidies the property sector enjoys. It may even turn out that the hidden benefits from govt which they enjoy equal on average the actual profit tax they pay.
Now that's the basis of a few more of your "pure gold" columns !
why dont you go and do the work you suggest Mr Adams rather sitting on your rear pontificating. We would be delighted to listen to your findings
Your classification of recipients of public fundings
into the needy and the greedy is interesting
About the needy, you’re quite clear
pointing at housing, healthcare … 46b social welfare
About the greedy, you point specifically only at barristers
who, if anything, rather resemble licensed looters and overpaid PR
for HK’s misguided way to secure the vainglory of rule of law
and not welfare recipients
Perhaps you may substantiate your arguments
with examples of other corporate welfare recipients
who they’re and how they beg.
Wrong metaphor perhaps
It’s always a power contest.
Who but pirates hoist their professional banners over Treasury Island?
Time to empower the government under constructive supervision
and not to fetter it with ideological trivialities perhaps
I partly agree with you, but again, you fire some of your bullets at the wrong targets. It is BIG business which gets the welfare.
Public infrastructure projects are not the only welfare handout. Most people pay 'welfare' to the property developers by way of exhorbitant prices and sky high rents with no security of tenure. Government policies have squeezed land supply, abandoned sales and building of public housing, allowed hundreds of billions of laundered money into HK's residential market from the mainland, and allowed these parasites into the higher levels of administration to dictate policy. It is not only big business which benefits; the most obscene and unfair form of welfare is the New Territories indigenous villager small house policy. This allows villagers to sell their privately owned agricultural land to developers at inflated prices while the Town Planning process (the word "planning" is a joke) grants them free plots of Government land to build cheap houses so they can receive fat rents or become millionaires by selling the houses, while most live elsewhere, almost never in the houses they build. In the meantime, our Town Planning Board, loaded with property developer appointees of the Chief Executive, allow the buyers of agricultural land to build housing estates in ecologically and environmentally sensitive areas. Our Country Parks are about to see unprecedented levels of housing development which will destroy them.


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