Carrie Lam still has a Hong Kong mountain to climb despite pledges

There are no practical solutions when it comes to the Link Reit, MTR fares and the Mandatory Provident Fund, and politicians who claim otherwise are posturing

PUBLISHED : Friday, 30 March, 2018, 2:19am
UPDATED : Friday, 30 March, 2018, 2:19am

There never were three “mountains”, only one. While still chief secretary, Carrie Lam Cheng Yuet-ngor had given the impression that the government would tackle major problems with the Link Reit, MTR fares and the Mandatory Provident Fund. So the chief executive has no one else to blame but herself when opposition lawmakers are again raising the issues.

In reality, the government can and should only resolve the so-called MPF offset, which allows bosses to dip into workers’ pensions to pay for their severance and long service when they are let go. This should never have been allowed in the first place, but here we are.

I have never publicly vowed to tackle Hong Kong’s ‘three mountains’ of Link Reit, MTR fares and MPF offsetting: Carrie Lam

The government has proposed committing more than HK$15 billion – yes, that’s taxpayer’s money – to subsidise bosses to lay off workers. It’s outrageous, but consider the alternative: ban the practice with no subsidy. You will have a real Occupy Central insurrection – by businesses.

As for MTR fares and the commercial behaviour of the Link Reit, it’s hard to see what the government can do other than what it has been doing or not doing.

As the majority share owner of the MTR, it uses its dividend payouts – and tweaks a fare adjustment formula – to maintain travel subsidies for low-income earners and families. Periodically, like now, the formula yields figures that allow the MTR to raise fares, and a political fight with the opposition ensues.

Hong Kong MTR fares set to rise by 3.14 per cent 

Why a government that professes a commitment to free enterprise should own so much of the MTR is one of life’s mysteries. But since it is already the major share owner, perhaps it should consider buying out the minorities – nationalise the whole thing. But is that what the opposition and the public want? That would for sure keep fares cheap.

Another one of life’s mysteries? Why did a government committed to public housing sell its assets in retail, parking and other commercial properties on public estates? That was how the Link Reit was formed. But once those properties were privatised, you can’t criticise the Link as a listed company to operate on purely commercial principles.

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Some opposition groups have suggested buying back the Link. That would be crazier than nationalising the MTR. Link share prices have risen almost sevenfold since its IPO in 2005. If the government were to buy it back, it wouldn’t be just paying the current market price but a huge premium on future earnings!

There are no practical solutions. Politicians who claim otherwise are posturing.