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Tom Holland

Acouple of weeks ago the South China Morning Post asked our leadership candidates what they would do on their first day in office as Hong Kong's new chief executive.
Their answers were lamentably unimaginative. Leung Chun-ying said he would 'meet with and listen to senior civil servants', while Henry Tang Ying-yen said he would 'introduce my team to the media and the public'.
No doubt conciliating the civil service will be an important task for C.Y., but it hardly makes for a ringing campaign pledge.
And yes, Henry, holding a press conference on your first day in office probably would be a good idea - but you really do need to have something to announce.
So, as our leading candidates are clearly desperately short of ideas, here are a few suggestions for things they could do on that difficult first day in their new job.
Cut the profits tax to 15 per cent
The chief executive should appoint a new financial secretary and instruct him or her to prepare a mini-budget, for delivery before August 1, which cuts the rate of profits tax paid by the city's companies from 16.5 to 15 per cent. 
That would lower our corporate tax rate below the effective rate paid by businesses in Singapore, restoring some of Hong Kong's lost competitiveness.
We can afford it. According to the government's budget forecasts, the cut would cost HK$9.6 billion over the next fiscal year, or just 14 per cent of this year's surplus.
What's more, a tax cut would help win over the business community, which is a good thing given that some of them really won't like the rest of these policy suggestions.
Halt work on all new infrastructure projects
The Hong Kong government has a history of underestimating cost and overestimating traffic on its new infrastructure projects by a factor of two. With that in mind, the chief executive should order fresh projections assuming realistic usage levels and cancel any projects which fail to meet the government's stipulated 4 per cent minimum rate of return. That would put an end to the Zhuhai bridge, the high-speed rail link to Shenzhen, and the Kai Tak cruise ship terminal.
 Ban buses and trucks with dirty diesel engines
The chief executive should order all buses that fail to meet Euro IV emission standards off Hong Kong's roads within a year, and all trucks a year after that, threatening the owners with stiff fines if they don't comply.
Slap a tax on empty flats
According to government figures, there are 228,000 vacant apartments in Hong Kong, even as the city suffers a housing shortage. Imposing a punitive 2 per cent tax on flats left empty for more than six months would soon increase the supply of accommodation for sale or rent, providing immediate relief.
 Scrap the application list and resume regular land auctions
The application list system, by which developers trigger government land auctions only by making binding bids, has been exploited by the city's big property developers to squeeze land supply and bump up the value of their existing land banks.
It should be scrapped. And the auction system should be changed so that instead of paying up front, successful bidders are allowed to spread their payments over the life of a development, which would open the property market to new competitors.
For good measure, the chief executive could also impose a tax on land banks, to encourage their development.
Scrap the small-house policy
The chief executive should announce that the small-house policy, introduced in 1972, has succeeded in its objective of providing acceptable housing for the villagers of the New Territories, and that therefore it is no longer needed.
As a colonial anachronism it should be scrapped immediately. In the new Hong Kong, it is no longer acceptable that a small group of citizens - many living abroad - should claim a special right to self-enrichment denied to everyone else.
Scrap the stamp duty on stocks and replace it with a capital gains tax
To reinforce the city's position as a leading financial centre, the chief executive should ditch Hong Kong's stamp duty, replacing it with a capital gains tax.
This would attract fresh liquidity to the Hong Kong stock exchange, which in turn would attract more new listings.
It would also have the tangential benefit of taxing the income of Hong Kong's tycoons, who at the moment get away with paying little or nothing to the government's revenue department. In the same vein, the chief executive could introduce a dividend tax.
That should be enough, at least for now, to provide our chief executive candidates with some ideas for their first day in office.
I'm afraid I haven't even started on what to do with the Mandatory Provident Fund. I guess that will just have to wait for their second day.



Seven first-day policy ideas for HK's new chief executive