Few subjects have raised such a united opposition as the government's proposal to broaden the tax base by introducing a goods and services tax. The arguments for doing this have been lost in the wealth of detail given in the government's consultation document.
Hong Kong's tax base is narrow. Our government's revenues come, generally speaking, from profits tax, salaries tax and land sales. 'So what?' the argument goes. 'We survived the challenges of the 1960s, 1970s, 1980s, 1990s, and we will do it again.'
But remember, our economy has changed. Hong Kong's strength was built on an industrial base. Now our factories lie empty and our industrial workforce has shrunk.
Our economy has changed dramatically, but the government continues to rely for its income on the same sources. Our government's reserves have been built on these sources by an improving economy, revenue from land, contributions from a comparatively small number of high-income earners and by squeezing government spending. When the chill winds - of recession in world markets or international crisis - blow, land prices will slump and profits shrink. Our revenue base is narrow and unreliable.
We have had to squeeze and restrain spending on health and education, just when the needs of society have never been more urgent. Families are shrinking, fewer babies are being born and we are living longer. We need to expand our education system - to provide our young people with more years of training and the skills needed for a changed economy.
Instead, we are having to import those skills - when we should be giving our own young people greater access to higher education. Many countries with broad-based tax systems have been able to respond to the challenges of changing world economies and globalisation, by reducing taxes to attract investment and talent. They have been 'going south' - warm and stable. Can we afford to 'go north' - chilly and uncertain - and increase revenue from existing sources to meet the growing needs for health, welfare and education? No, we cannot!