THIS HAS BEEN a week of appallingly mixed messages from the Government.
On the one hand, we are told public finances are in dire condition and that our reserves will be wiped out unless drastic action is taken to reduce expenditure and raise revenues. At the same time, Chief Executive Tung Chee-hwa outlines plans for $600 billion worth of infrastructure projects, the bulk of the money coming from the public coffers.
So what are we to believe? The report into government finances that predicted the budget deficit was likely to stay at $66 billion for the next five years and effectively wipe out the reserves; or Mr Tung's assertion that though the deficit was a problem, there was still money to spend on major infrastructure projects while reducing the gap between revenue and expenditure?
There is little doubt that government finances are in a parlous state. Declining income from land premiums and investment income, a lop-sided tax system which leaves the majority of the population untouched, coupled with steadily rising expenditures on salaries and social security, have produced a fiscal time bomb.
Without drastic cuts in expenditure and increased revenues through taxation, Hong Kong could, in an alarmingly short time, slip to a state of Argentinian collapse.
The Government ought to be spreading the word that hard times are ahead and that serious belt-tightening is required. Instead, we get announcements about large-scale public expenditure, including perhaps on a new government headquarters, that just do not make sense.
How, for example, does the increasing demand for civil service pay to be cut and their numbers reduced, square with the desire to spend money on a new government headquarters?