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Jake Van Der Kamp

Is there something in the post of chief secretary that automatically tempts the incumbent to take pot shots at the boss?

What other way can there be of treating certain remarks made by Donald Tsang Yam-kuen on Monday? In addressing a conference on 'Preparing for Hong Kong Disneyland', our Donald mouthed the words 'I only hope that we never lose sight of one thing - that it was all started by a mouse'.

Go on, Mr Tung. If that's what he thinks of you, then call him a duck to show him where he  fits in the Disney menagerie. Don't let him get away with it.

It is time once again to spike a myth much beloved of both men. This is the one that for expenditure of HK$22 billion in public funds on Disney, we will get a return of HK$148 billion in economic benefits over 40 years, which makes it a wonderful investment.

Mr Tsang said so again in his speech.

First point, a minor one. Assume a constant 5 per cent annual growth rate in these economic benefits to get to a total of HK$148 billion over 40 years. It is a conservative figure for what you might expect from inflation and business growth.

Next, calculate what discount rate would make that worth HK$22 billion today.

Your answer is 8.7 per cent and no private sector entity would take on the project with so low an internal rate of return.

You start in double digits and don't try 10.

This, of course, assumes that the HK$148 billion is really a return to the public purse. Only a trick of semantics makes it so. What Mr Tsang is actually referring to is expenditure on gross domestic product.

All he is really saying is that he expects that we will spend HK$148 billion on building the park and going there over the next 40 years.

It is disingenuous of him to make it seem a return on investment.

This leads to the next difficulty. GDP takes no account of whether money is spent well or not. All it concerns itself with is how much is spent. Your correspondent has used this analogy before but let's try it again. We could get exactly this same HK$148 billion in 'economic benefits' if we hired 30,000 workers at HK$10,000 a month each to spend the next 40 years digging a tunnel with their bare hands from the tip of Lamma Island to Australia.

It does not matter that the tunnel will never be completed. It would be a complete waste but it would still give us that HK$148 billion in GDP, high-quality GDP too, as it would all be classified as fixed capital formation. Ask any economist. He will tell you it is true.

So our real question remains the one Mr Tsang has so artfully skidded around. What do we get back from a Disney Park?

Think about this. The jobs we create there will be menial ones of scooping ice-cream and those jobs will almost all go to foreign migrant workers anyway. You yourself will visit the park once or twice and then find you have the same reaction as you do to Ocean Park after the second visit. Ho-hum.

What we will actually have is foreigners flying on foreign-owned airlines, staying in foreign-run hotels, buying imported junk food and goods at Disney and then leaving again as quickly as the money they spend goes back abroad, just what that foreign-dominated tourist lobby wants.

All that you will get is a very big bill for building the infrastructure the tourist lobby needs to make its money this way plus the achievement of having proved to visitors that there is nothing unique in Hong Kong. It is all just another suburb of Los Angeles.

Meanwhile, our GDP growth will suffer as commercial rents go through the roof because there is so little space for offices after we have given more than three times as much of our scarce land to Disney as is occupied by our entire office stock. What a triumph of economic benefit.



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Mighty mover is only a mouse