DAB legislator warns proposed tax will drive shoppers away The Democratic Alliance for the Betterment and Progress of Hong Kong is determined to oppose the introduction of a goods and services tax (GST) in the city, and says there that is no scope for concessions from the government on the issue. Party member Chan Kam-lam yesterday warned Chief Executive Donald Tsang Yam-kuen he risked a political setback if his government insisted on putting forward the proposal. He said Mr Tsang should clarify his stance on the levy before seeking re-election, or he could face a challenge from his rivals. 'The chief executive will have to face re-election in March next year. Whether this tax is beneficial to his bid for re-election, and whether it will stir up public dissatisfaction which hinders [progress towards his goal of] a harmonious society, Tsang Yam-kuen has to think about it himself,' Mr Chan said. 'If there's any other contestant, he can voice his opposition to the levy in a high-profile way.' The party legislator said the introduction of a GST could lead to social instability. 'If Tsang Yam-kuen implements this levy next year, it might stir up a million people to take to the streets. What is he going to do? He either withdraws the plan or goes ahead. If he chooses to take the risk, it will lead to social instability and a sluggish economy. 'Overseas experience shows leaders were all defeated in elections following introduction of a GST ... Even if there's universal suffrage, one will lose in the next round of elections,' the legislator added. Mr Chan appeared to have overlooked Australian Prime Minister John Howard's re-election following the introduction of a sales tax. The political impact of the GST proposal has already been felt. Public confidence in Financial Secretary Henry Tang Ying-yen suffered a record drop after he outlined the case for a GST. A poll conducted by the University of Hong Kong showed confidence in him plunged 19 percentage points, to 50 per cent, last month. Mr Chan said the DAB would express its opposition to the tax to Mr Tsang next week when he consults party members on his October policy address. The party will also submit results of its poll which found 81 per cent of people opposed the introduction of a GST, with 71 per cent indicating they might change their consumption patterns under such a tax. Mr Chan suggested the government's claim the levy would raise HK$30 billion a year was an overestimate, since the tax would hurt city shops. 'If a GST is introduced and the five-day working week becomes more common, we believe more people will go to nearby cities for shopping. Local consumption will go down further.' A GST would also widen the wealth gap as the poor would be hit hard by such a regressive levy, he said.