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Gary Cheung

Jimmy Cheung

Financial Secretary Antony Leung Kam-chung has stirred yet another controversy after he was found to have bought a new luxury car just weeks before he announced tax increases for vehicle registration in his Budget.

But Mr Leung denied he was trying to avoid taxes, saying he needed to buy a bigger car to transport his new baby daughter.

He conceded that he should not have bought the car in light of a possible tax increase and said he would donate to charity $100,000, which is twice the amount that would have been due in vehicle registration.

Some lawmakers demanded an apology from the financial secretary, saying that the incident brought his integrity into question.

Others called for an independent inquiry followed by punishment according to the code of conduct for ministers.

Academics also warned that the financial chief, who has already upset the community with his recent remarks on the Budget, could further bring the government into disrepute.

The Apple Daily  yesterday reported that Mr Leung had paid $790,000 for a new Lexus 430 in late January. The price immediately shot up to $840,000 after higher registration taxes for new vehicles were imposed in the Budget last Wednesday.

It is estimated that the stiffer progressive tax band will bring the government an extra $700 million a year in revenue.

In a hastily arranged media session at his official residence yesterday morning, Mr Leung confirmed that he bought the new car on January 23 and registered it on the same day.

He said he needed a new car to carry his new-born daughter and family. Mr Leung's first daughter by former Olympic diver Fu Mingxia was born on February 26, a week before his budget delivery.

Apart from the BMW provided by the government for official use, Mr Leung also owns a Porsche 911 Carrera and a Toyota Land Cruiser four-wheel-drive.

'I believe people would understand that parents-to-be would prepare everything before the birth of the child,' the 51-year-old first-time father said.

He said that he only made the decision to raise the first registration tax in February but admitted that, to avoid suspicion, he should not have bought the vehicle.

'I have genuine needs. I did not do that to avoid tax,' he said.

The financial chief apologised twice in three days last week amid growing anger against his plan to raise taxes. His first apology came on Thursday after angry callers flooded post-budget phone-in programmes with harsh criticisms of the government's performance.

He apologised again on Saturday, but this time said he was sorry that people were affected by the budgetary measures in addition to the economic downturn.

Mr Leung was also forced to admit he had used wrong expressions after people were enraged at hearing him say 'the duration of enjoyment will be paid by the same duration of suffering' on Thursday. But he said he was referring to the bubble economy rather than telling Hong Kong people that they deserved to suffer because they had enjoyed good times in the past.

Emily Lau Wai-hing, of The Frontier, said the car tax controversy would make people question Mr Leung's integrity.

'I find it very shocking that the financial secretary could have done something like that. Given the sensitivity involved, I think people will question his integrity. It is really deplorable,' she said.

'Mr Tung has been stressing that his appointees all have high integrity. I wonder how he would punish him this time.'

Ms Lau was referring to the code of conduct governing ministers' behaviour. The code, which forms part of the appointment terms, says officials should ensure that no actual or potential conflict arises between their public duties and private interests.

She said she would write to Mr Tung demanding an independent inquiry into the matter.

Democrat vice-chairman Lee Wing-tat said ministers involved in such scandals overseas would have to step down. 'It wouldn't help even if he donated $1 million,' he said.

Lee Cheuk-yan, of the Confederation of Trade Unions, vowed to follow up the matter: 'People will find what he did very offensive. One would think he made use of his authority to raise taxes while avoiding such an increase himself. How can you justify that to other car buyers?'

Liberal Party vice-chairman Selina Chow Liang Shuk-yee said the public should not challenge the financial secretary's need to buy a new car. She added, however, that he should have disclosed the purchase and paid the new tax as soon as he delivered the Budget.

Speaking in Beijing, Executive Councillor Tsang Yok-sing said Mr Leung had been careless in buying the car before he delivered his budget speech.

Political analyst Joseph Cheng Yu-shek, of the City University, said Mr Leung lacked political wisdom: 'The dismay kicked up by the financial chief over the past week will also undermine the administration's authority.'

Ma Ngok, from the University of Science and Technology, said Mr Leung's explanation was not convincing, pointing out that planning for the Budget started as early as last June.

'Even if there was no final decision [in January], there must have been some sort of preliminary proposals around,' he said.



The financial secretary avoids his own tax rise on luxury car purchase