My TakeCommunity funds would restore some credibility for the Hong Kong government
Instead of pouring public money into fancy mega projects, it would be better spent on improving the lives of the people in the name of social equity
By now, it should be clear that large-scale infrastructure projects so loved by our post-1997 governments have only served to delegitimise it politically.
This is often said to be the result of collusion between the government and big business. Maybe, maybe not. I think it has more to do with the current system of public works funding, and the distortions it forces into the policymaking process.
In simple terms, when you are sitting on a huge pile of money that keeps coming in year after year and cannot be used for anything else than public works, you, too, would think of spending it on the single mega project – to make work for bureaucrats and aggrandise yourself while creating jobs, albeit only temporarily.
Our system of public financing is dysfunctional, but there is no will to overhaul it. The government wants to make housing more affordable, yet everything it does is pro-cyclical in encouraging high land value and property prices.
The windfalls from land premiums, which account for between 20 per cent and 25 per cent of annual government revenue, go directly into the capital works reserve fund, which stood at slightly over HK$100 billion last year.
How much longer does Hong Kong have to wait for an integrated housing strategy?
As the fund’s name implies, the money has to be used for capital works. That’s not completely accurate, though. A clause in the fund, set up in 1982, affirms that “the Financial Secretary may transfer from the Fund to the general revenue any balance in the Fund which is not required for the purposes of the Fund”.