CY Leung policy address 2014

Middle class shouldn't begrudge doing good things for the poor

Mike Rowse says Leung's policy plan of pragmatic measures will put tax dollars to good use

PUBLISHED : Monday, 20 January, 2014, 3:31am
UPDATED : Monday, 20 January, 2014, 3:31am

The immaturity of some of our politicians shows no sign of abating, as is evident from their responses to the policy address delivered last week by Chief Executive Leung Chun-ying.

In his first address a year ago, Leung concentrated on the housing situation, which, on any sensible analysis, is the most serious problem facing Hong Kong. We have some of the highest prices on the planet, alongside some appalling living conditions that would shame a third world country.

This time, he gave an update on the various plans to address the issue and the prognosis is reasonable: it will take time because, after a decade of neglect, it was bound to. But after a massive behind-the-scenes planning effort, the pieces are in place, the bulk of the land has been found and we are on our way to a solution.

The main thrust of the policy address could therefore focus on our next most serious problem: the shocking findings on poverty revealed a few months ago by the Commission on Poverty, a body resurrected by Leung in one of the earliest decisions of his term, after being disbanded by the previous regime.

We have the first official poverty line in Hong Kong's history, and a whole raft of poverty alleviation measures to bring help to those most in need. These will provide practical assistance and support, in particular to the working poor. This is not a welfare state; it is a helping hand reaching down to pull up those trying to help themselves.

Other sections of the address outline good pragmatic measures in elderly care, education, the environment and economic development.

What has been the response of our politicians to this workmanlike manifesto? "There's nothing for the middle class," says chairman of the self-styled Voice of the Middle Class Alvin Lee Chi-wing. There was immediate support for this view from the Business and Professionals Alliance, who also shed a tear for small and medium-sized enterprises. Other politicos have since joined the chorus.

Look again, everyone; the policy address is full of good things for the middle class. First of all: no new taxes. All the things being proposed can be comfortably financed without upsetting our basic low-tax environment. If you think that is not a big plus, talk to your middle-class friends in Europe or other advanced economies and see how they're doing.

Secondly, developing our economy and maintaining our pro-business operating environment bring most benefit to those best able to take advantage of them, namely, the very businesses and professionals now complaining.

Thirdly, for those fortunate enough to be in the middle-income group, the priority outside the economy relates to quality-of-life issues: the environment, the arts and culture, sports, and so on. Progress is being made in all these areas.

But there is a more fundamental reason why the middle class and those claiming to speak on their behalf should applaud the policy address. The reason we pay taxes is so the government can do good things with our money.

What was proposed last week is a list of very good things, in some cases urgently needed. Given that the tax threshold is set so high - fewer than half of working people have to pay any salaries tax at all - taxpayers are by definition among the better off in our community.

I can think of two main reasons why a sensible and reasonable policy address is being attacked. Some people just don't like Leung as a person. Others object to his policies in other areas, in particular political reform. On this, I, too, have serious doubts about what is going to emerge when the consultation period ends.

But neither of these is sufficient reason to attack the proposals to help the poor because they don't also help the better off. It's an immature response. Thinking of the government doing good work with my tax dollars gives me a warm, fuzzy feeling. Or maybe that's just the zero tax on wine.

Mike Rowse is managing director of Stanton Chase International and an adjunct professor at the Chinese University of Hong Kong.