Enough talk about a widening rich-poor gap, let's have hard data

IS IT TRUE that in Hong Kong, the rich are getting richer and the poor are getting poorer? Do we have growing income disparity?

The question was at the heart of several debates on the agenda of the Legislative Council on Wednesday. A proposed cutback in salaries taxes was rejected on the grounds that making life easier for the rich is inappropriate when life is growing harder for the poor while a measure to establish a poverty line as a way of identifying the poor was rejected when wealthier legislators objected.

We have now also been told that Chief Executive Tung Chee-hwa is to focus on problems of poverty and poverty relief in his next policy address.

The difficulty in all this is that while there has been much talk of the rich getting richer and the poor getting poorer, precious little hard evidence has yet been adduced to demonstrate the assertion one way or the other.

A good deal is said of something called the Gini coefficient, which is a mathematical tool used in measuring relative wealth in a population but, just as a hammer is not much use without a nail, a Gini coefficient is not much use without good underlying data on incomes and Hong Kong has not structured its statistical reporting to obtain an accurate view of income disparity.

Let us get one thing straight immediately, however. There are actually two disparities we need to consider here, income disparity and wealth disparity.

Not all higher income people are wealthy, not all lower income people are poor and, when you consider how property values and share prices fell after 1997, it is entirely possible that wealth disparity has diminished since that time even if income disparity has grown.