LET US REJOICE. We have evidence at last of progress in government budget thinking, admittedly not much but a steep fiscal deficit can do wonders to launch senior officials on a learning curve. Beginning the ascent of that curve, right from the bottom too, is Sarah Liao Sau-tung, the new Secretary for the Environment, Transport and Works (a portfolio that has all the natural cohesion of a salmon and peanut butter sandwich). She has discovered that the private sector can do some things as well as government can. It is a great discovery. I imagine if she went to America one day she would be filled with similar wonder at her achievement in discovering a new world. Move aside, Columbus. In any case, she now proposes (well, not quite, she was apparently just thinking out loud, the normal way policy is formulated in this administration) that the private sector use its boundless cash to fund projects traditionally undertaken by the public sector. She has therefore approached several professional associations for ideas on how to proceed and the Hong Kong Institute of Architects has agreed to prepare a consultation paper. I have an idea for, Ms Liao. Before you discover America perhaps you might try to discover Britain. You will find there is a mountain of consultation papers on privatisation as high as the top of that learning curve you are trying to climb. You will also find vast experience of it in practice and people who will be happy to guide you up that curve. Happy, that is, if they do not first decide that you are so far behind them as to make it a waste of their time. Personally, that is the view I would lean to if I were one of them. Perhaps you would do better to make that first trip one back to school, madam. Then we have Financial Secretary Antony Leung Kam-chung suggesting that it may be a good idea for the government to consider stopping or delaying projects that are not cost effective in order to tackle the growing fiscal deficit. What a discovery once again. Surely it would never occur to you if you had lost your job and were in overdraft at the bank that the time might have come to put off that dream of owning a Ferrari. How glad we may be that a ghost of this understanding has finally revealed itself to the man who controls more expenditure than anyone else in this town. Of course he did not specify what sort of Ferrari projects he had in mind. My guess is that he does not even know how to classify which ones are cost effective and which ones are not. This would require rigorous internal disciplines on measuring cost of capital and return on capital. There are supposedly some guidelines on this in government but when the Mass Transit Railway Corp can go public with a pledge of a 1 to 3 per cent return over cost of capital on new projects and no-one stipulates whether this means a 1 per cent minimum or a 3 per cent minimum or a 3 per cent maximum or the moon made of blue cheese then I am not much impressed. What I imagine happened there is that someone said, 'Well, I dunno, waddya say, Joe, shall we make it 1 to 3?' and someone else said, 'Yeah, why not, where we gonna go for lunch today?' Then again, Mr Leung may have been wise to say nothing on the subject. Almost any reasonable figure he could apply as a benchmark for 'cost effective' would have him scrapping Cyberport, Science Park, the Innovation and Technology Commission, the small and medium enterprise handouts and three-quarters of the road projects that Ms Liao's road-mad transport planners dream up. We cannot have that. It would reflect badly on the boss' grand strategic thinking and show that he does not even know where the learning curve is, let alone climb it.
