Much has been said about government collusion with business in Hong Kong and unfortunately, some of that criticism is legitimate. One of the biggest examples was the government giving in to heavy lobbying by the finance industry, implementing the ill-fated Mandatory Provident Fund (MPF). Recent reports show returns on the MPF have been averaging a woeful 4 per cent per year - less than the growth of the Hang Seng Index. Further, activist David Webb claims that up to 55 per cent of total contributions to the MPF will end up as commission payments to underperforming MPF providers, rather than helping individuals save for their retirement.
Like me, Mr Webb's solution is to abolish this scheme or to replace it with something voluntary. We cannot get it made voluntary unless we point out its weak moral base.
As a hair-brained idea, the MPF is based on the flawed moral premise that the providers are helping people meet their retirement goals and that it is somehow right to use coercion.
Nurturing the idea that most people are irresponsible with their money, the Mandatory Provident Fund Authority and the MPF providers position themselves as lord overseers, who think they are better than anyone else when it comes to investment.
Employees, through their employers, must hand over part of their salary. There will be prosecution and possible jail sentences should anyone dare plan their own financial future. It takes away each individual's right to think and make their own decisions based on their own requirements. For many, the MPF is just a bad investment - period.
In fact, a scheme similar to the MPF was floated as part of a public consultation in the early 1990s and roundly condemned because it was an attack on our virtues. No wonder there was no consultation for the latest incarnation, when it was refloated and rammed down our throats several years later. The answer to any government collusion such as the MPF is not more government regulation but rather the total removal of government favouritism by ending preferential treatment.