Supporters of a sales tax in Hong Kong should look at what happened in Japan. I was a retailer in Japan when a three per cent sales tax was introduced. The country has still not recovered and if it was imposed in Hong Kong it would damage the SAR's retail competitiveness. This would not help our economy. The answer is to re-peg the HK dollar to the US dollar. This will stimulate external demand. Hong Kong, like Tokyo is a speculative property bubble. Let us take the pain quickly now and re-peg at HK$10 to US$1. The $13 to US$1 as one of your correspondents proposed (as it used to be in the good old days) is probably too drastic, but provides food for thought. In addition, the 187,000 civil service is far too large for a city of 6.8 million. It would be far better to have an effective force of around 90,000 and bring this bloated civil service to the point where it adds value to the city. This is clearly not happening at the moment. In terms of quality of life, if Chief Executive Tung Chee-hwa puts his support behind just two issues it will probably bring results. His populace (not electorate, as he was, in effect, elected by Beijing) are screaming for pollution-control measures and protection of our few remaining historical sites. Let us see if he can deliver on those two issues. ROB NAYLOR Jardine's Lookout
