Government has resources to set up a general pension fund in Hong Kong

PUBLISHED : Monday, 05 December, 2016, 5:11pm
UPDATED : Monday, 05 December, 2016, 10:05pm

It appears that former chief executive Donald Tsang Yam-kuen (“Former city boss critical of delayed projects”, November 22) agrees with your editorial (“Leung’s team must keep eye on ball”, November 22) when he points out that the current administration is not running a tight ship in the implementation of major projects.

This indictment surely must cover the financial secretary and the chief secretary and the chief executive. This therefore questions the suitability and capability of Leung Chun-ying, John Tsang Chun-wah and Carrie Lam Cheng Yuet-ngor for the post of chief executive in 2017.

However, I think Donald Tsang is also attempting to polish his own legacy. It should be remembered that many of these massive infrastructure projects were given the go-ahead under his guidance.

The civil engineering problems causing the delays and cost over-runs on the Hong Kong-Zhuhai-Macau bridge, the express rail link, and the Shek Kwu Chau incinerator are in part because his administration pushed ahead on these projects before carrying out thorough geotechnical and engineering feasibility studies.

Jake van der Kamp has pointed out many times in his columns that in economic terms these projects are a huge waste of public money, even before the seemingly out of control cost over-runs. These massive public funds would have been far better spent on establishing a proper provident fund for the people who give their working lives to make Hong Kong a success.

The Mandatory Provident Fund is contrived and confusingly complicated, as well as being inadequate. Chief Secretary Carrie Lam outlined plans to make these pensions work better (“HK plans tweaks to unpopular pension scheme”, November 10) , but the government is still trimming at the fringes rather than getting to the heart of the matter.

In 1998, it acquired a large portfolio of Hong Kong shares to sustain the linked exchange rate during the Asian financial crisis. Approximately HK$140 billion (by October 2002) in these Hang Seng constituent stocks was returned to the market as the Tracker Fund of Hong Kong, an exchange traded fund.

It was a great opportunity to start a genuine pension fund by using this disposal.

Instead, the government pulled off the confidence trick of selling public assets back to the public. That government income is probably now sitting with the Hong Kong Monetary Authority. It could and should be used as the foundation for a general pension fund.

Frank Lee, Wan Chai