If Leung Chun-ying's maiden policy address last year articulated his vision of what he wanted his government to achieve, his second yesterday adopted a more pragmatic approach aimed at producing practical results. The focus on poverty relief will deliver them. Last year the chief executive's main message was homes for everyone. With prices so high and too many living in substandard conditions, he had his priorities right, except that he raised people's hopes of finding affordable homes when it is not a straightforward matter to lay out such goals and deliver them.
A year later there are few results to be seen and many people are critical of the lack of housing land supply. Leung has apparently learned his lesson. He says, rightly, that the housing shortage problem is serious. But this time he has shifted the focus to land supply as a medium-to-long-term challenge - not just for the government but for the whole community. He acknowledges that it will involve making difficult choices and accepting trade-offs. This will call for a change of community mindset on land use.
In the medium term, he says the government has now identified about 150 sites that have to be rezoned for residential use and made available over the next five years to provide about 210,000 additional public and private housing units. Further evidence that he has learned the lesson of last year's overambitious goal emerged in a post-address briefing by government sources. It was they who revealed that the administration is in fact confident it has identified enough land to meet its 10-year target of 470,000 new public and private housing units, though that is still dependent on agreement about land use with district councils, and so on.
HK$3 billion relief scheme
Officials had already leaked a number of other features of the policy address, including a HK$3 billion relief scheme for families of the working poor that compares favourably with proposals by at least one charity organisation. It may be seen by some critics as heading in the direction of a welfare society, but it is comprehensive, dovetailed with social welfare schemes and based on two principles aimed at discouraging a handout mentality: subsidies are linked to length of working hours and subject to a means test. Even so, the government will need to set up a mechanism for combating abuse of the allowance. That said, Leung rightly pointed out in remarks after his speech that the cost is comfortably accommodated within the government's surplus, which happens to add to fiscal reserves far in excess of what we need to set aside against a rainy day. Nonetheless, it was good to hear him affirm the government's commitment to the Basic Law principle of financial prudence.
Supplying land for hundreds of thousand of homes and closing the wealth gap raises the question of the third, and ultimately most important, element of Leung's second policy address. This is the restructuring of the city's economy in the face of the accelerating opening of financial markets on the mainland, to which the city has been the main gateway.
Leung flagged his vision by giving notice he will reinstate a proposal to establish an innovation and technology bureau to boost the development of value-added industries, or widening of our economic base. This was one of a number of proposed new bureaus abandoned in the face of conflict with lawmakers during the troubled early days of Leung's administration. This time, apparently, he is confident he has enough support in the Legislative Council. We trust he is right. The new bureau would facilitate the economic development of Hong Kong, including Lantau Island and the northern New Territories, and the building of MTR lines. A long-term plan to create a Lantau "metropolis" - or a third core business district after Central and Kowloon East - includes a vision of a massive reclaimed island in waters between it and Hong Kong Island.
Middle class predicament
If there is anything in the policy address for the middle-class in return for the taxes they pay, or for that matter for the "sandwich" class, it is to be found in extra government funding for Leung's goal of free kindergarten education and access to further tertiary education for associate degree holders. But compared with subsidies for the working poor, the middle class has missed out. Leung said later the middle class cared more about the overall improvement of their quality of life than cash handouts, and the government was trying hard on issues like the environment, housing, education and health. Some members of the middle class, however, are not entirely joking when they claim to belong to the working poor. Leung risks being accused of losing sight of their predicament amid a wealth gap, unaffordable housing and long hospital queues. As a result, hopes of consolation in the budget will grow.
Overall, Leung deserves credit for trying to strike a balance between pragmatism and economic vision, so long as he remains mindful of the potential financial burden of welfare, and the legitimate concerns of the middle class.