My Take

How Hong Kong's government subsidises those who need it least

PUBLISHED : Thursday, 27 March, 2014, 4:45am
UPDATED : Thursday, 27 March, 2014, 4:45am

We hate the poor and favour the rich and well-off. The way our government has favoured our tycoons and helped them to unimagined fortunes is well-known. Far lesser-known is how much we have directly subsidised the middle and upper-middle classes since 2004, mostly through property-related concessions.

That's why a new analysis by the Legislative Council Secretariat's research unit on so-called sweeteners given out in the last 10 budgets is a must read for Hongkongers, many of whom seem to have a certain idée fixe about the poor being lazy and living on public largesse. But who benefited most from sweeteners? Not the poor or low-income groups. Not taxpayers or small- to medium-sized companies. Roll the drums please: It's private flat owners. Since the government consistently overestimated expenditure and underestimated revenue, it has faced an embarrassment of surpluses every year in recent time. Since John Tsang Chun-wah became finance chief in 2007, he has underestimated revenue by a total of HK$582 billion. As one-off sweeteners, he has given back HK$220 billion.

Of the HK$220 billion, 28.7 per cent went to property owners and 23.5 per cent to taxpayers. Only 3.9 per cent was given to low-income groups and another 7.6 per cent to disadvantaged groups. Bear in mind that while we saw during this whole period one of the greatest bull runs for the local property market, our government, guided by the financial wisdom of Mr Tsang, has directly subsidised the segments of our population that needed the least welfare support, primarily through rates waivers and property tax reductions.

This is obscene not only because the undeserving got the most public subsidies, but that Tsang's pseudo-financial prudence wasted our surpluses that could have been used to invest long-term for Hong Kong's future. Might we not have more and better schools, hospitals, universities, healthcare services and retirement funds? No. Instead, to cement his legacy, Tsang now poses himself as the prophet of fiscal rectitude against future structural deficits from out-of-control spending on education, welfare and healthcare.

Here's a man who never deviates from singing the same tune.