Hong Kong must stop burning money on subsidising households’ electricity bills

What was supposed to be a one-off measure during times of embarrassing riches has now become a permanent fixture of city’s budget

PUBLISHED : Wednesday, 02 December, 2015, 10:10pm
UPDATED : Wednesday, 02 December, 2015, 10:14pm

The government’s electricity subsidy has always been understood to be a temporary “sweetener”. But, having lasted almost eight years, it’s looking like permanent recurrent expenditure to many people. That’s why finance officials recently told the Legislative Council that after four rounds of the subsidy scheme, it could not be extended for “an unreasonably long period”.

The current round is set to end in June next year. The government is preparing the public not to expect this scheme to continue beyond that date.

Some lawmakers have criticised the government for being miserly. But the government is right to end the subsidy. In fact, it should not have allowed the scheme, which costs a whopping
HK$22.3 billion, to continue for so long.

It is a wasteful subsidy in every sense of the word. Introduced in 2008 and continued thereafter, it was prompted by an embarrassment of riches from the government’s massive budget surpluses. But it is a short-sighted quick fix, a confession by our officials that they have no better ways of spending valuable public resources than to hand out money.

Another reason is that those in charge of public finance hate to commit to any substantial recurrent spending items, so they prefer one-off handouts or sweeteners, which may be extended for a period of time but called off whenever it suits them.

The scheme has benefited 2.5 million people, regardless of the economic status of their households. Why should well-off and rich families receive a subsidy for which they have absolutely no need? The subsidy would have been more justified if it had targeted lower-income groups.

The electricity subsidy scheme not only shows the government’s lack of imagination at social betterment; worse, it encourages people to use more electricity at a time when we should be conserving power and using more alternative and environmentally friendly energy sources.

Every year, we produce massive amounts of waste without an adequate or effective recycling regime. We waste millions of tonnes of food, and use immense amounts of water just to flush toilets. Instead of educating the public about the virtues of conservation, energy-saving and going green, the government, in effect, tells people to consume more electricity from coal-burning plants. This is not the message we want to send to the next generation. It’s time to end the subsidy.