• Thu
  • Sep 18, 2014
  • Updated: 9:13pm
My Take
PUBLISHED : Thursday, 27 February, 2014, 4:06am
UPDATED : Thursday, 27 February, 2014, 4:06am

One-dimensional thinking afflicts Hong Kong's budget

There seems to be fixated, one-dimensional thinking among our officials. Whenever they fret about our declining competitiveness, they inevitably cite tourism and information technology like magical chants, as the panacea to all our economic ills.

You have a perfect example of that in finance chief John Tsang Chun-wah's budget yesterday. However, expenditure items such as public health care and education are treated like they are liabilities. Perhaps as accounting items.

But what if it's the other way round? Well, let's stop using meaningless words like world-class. But suppose our systems of public health care and education are of such a high quality and compare favourably with those in the most advanced economies in the world. If the health of our citizens is taken good care of and our children, whether rich or poor, are getting the kind of education that would make them globally competitive, would that not make us far better off? Would that not be a straightforward goal that would make our city far more liveable and competitive, and cause less social tensions than expanding tourism - read mainland tourism - or creating an IT industry we never had and have no idea how to develop?

But the way Tsang the fiscal hawk talked about it, you almost think health care, welfare and education will imperil our future if we don't bring down their costs.

His working group estimates - it sounds to me like scare tactics - we will have a structural deficit in 15 years even if we don't spend an extra cent on education, welfare and health care; eight to 10 years if we increase their spending by 1 to 2 per cent; and just seven years if we follow the historical trend of a 3 per cent increase. For someone like Tsang, scenario one is bad enough; the other two will spell the end of the world. So you either expand government revenue or cut spending.

Someone like Tsang will never consider raising existing taxes or creating new ones. So that pretty much leaves cuts. I have no idea if Tsang's fiscal predictions are correct; this is the guy who never got one right from year to year. But I think we can safely predict that, as our public education and health services deteriorate, our society as a whole will become more divided and also less competitive.

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This article is now closed to comments

pslhk
AL’s criticism against unidimension makes better sense than GM’s strawman
-
As solutions to social issues
financial decisions have inherent limitations
FS cannot be appraised as ceo
-
Let me float an idea using education as an example
What can money do
when all available educational supplies have long attained optimal yields
and there isn’t any new educational option on the table
about how to improve the educational possibility curve?
-
diminishing marginal return
-
It’s EdBu’s job to come up with educational proposals
for the FS to consider apportionment
Surely we wish to extend free ed from 12 to 15 years
when EdDept has kindergartens regularized for public funding
-
If structural deficit is in the offing
and I’d deem it more a probability than a possibility
it would be unidimensional to respond
by “expanding government revenue or cut spending”
but that may well be the limited mandate of the FS
-
It’s up to the various ministers
for development, banking/monetary affairs, environment, etc
to come up work proposals together with ways and means
such as how to invest to expand the economic base
and not just the tax base
for the FS to balance costs and benefits
and finalize an overall budget
johnyuan
FS role in goveerance is overblown and outdated. A bean counter no more for the Kings and Queens in the colonial time. We are punished twice to pretend that a FS is essential -- pay so much for a useless service. The buget speech is just a pompous act from the colonial saga.
pragmatist
btw, there is no technology or technical talent in HK. it is at a shameful level - most universities and major retail chains have awful websites (SCMP's main page is majorly disorganized too).
So sorry to see the bean counters have so much influence over development and lives.
Not even a single article that sees any sense in the governmental actions - is the message never clear enough for those who are supposed to serve us?
BenS
Agreed! I would like to point out that IT industry is not suitable for Hong Kong in my opinion because of the high rent and living expense in HK. Also if you look at the big IT companies in China and US, they always stem from and root in big markets, such as Taobao in China and Amazon in US. HK in comparison is negligible and gives little space for a IT startup to prosper. Besides, HK has issues with China so the logistic systems cannot be readily integrated, that's why I see basically HKers can enjoy little convenience of the E-commerce industry.
All in all, I think HK officials better think other means to develop economy.
dascaldasf
I am in total agreement with AL. Our FS should have retired years ago.
johnyuan
The job itself should be expunged.
anthonygmail
Our civil servants can compare with the mandarins of Ming & Qing China so we cannot expect any multi-dimensional thinking. How can we, when all they have done was pushing paper around for a few decades.
John Adams
"Tsang the fiscal hawk " ?
More like Tsang the dead sheep !
When has anyone ever been attacked by a dead sheep ?
johnyuan
The one dimension thinking is a tradition in Hong Kong since its adoption in the 70s. It was a time of booming property development when the public were lead by a Superman. We still see herd’s behavior flocking to whatever is said and done without critical thinking. Hong Kong can’t be a world city if life is that simple. Look we still have 30,000 strong of property agents pushing a necessity.
impala
Mr Lo completely misses the mark again, as ever so often. Did he actually listen to or read the budget speech at all?

The Chief Financial Nitwit made it very clear, as is also remarked in Tom Holland's column today. The solution to the looming problem of a potential budget deficit, is that "government should preserve, stabilise and broaden the revenue base."

Not cuts. Taxes.

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