Why rules are often made to be broken
- As decisions on public housing and MTR fares have shown, sometimes formulaic mechanisms have to be avoided in order not to reach absurd conclusions
Bureaucrats in Hong Kong love rules, so they don’t have to make decisions and take responsibility. In some areas, that has worked well.
The US dollar peg, which functions as a currency board, is one good example. If nothing else, you really don’t want to have some civil servants appointed to the Monetary Authority looking at their computer screens all day and having to decide whether to raise or drop interest rates.
Elsewhere, though, it’s often counterproductive to follow preset rules. Sometimes, you need someone to make a decision, especially when it’s a no-brainer. In the case of rents for public housing and fares for the MTR system of which the government is the majority shareholder, it’s time to review whether we need rigid rules to determine price levels.
Following the latest housing review, people living in public estates face a 10 per cent rise in rents.
Obviously, given the dire conditions the local economy has found itself with many people suffering wage cuts, loss of income and unemployment, it makes no sense to raise rents now.
Housing chief Frank Chan Fan has told the legislature that more than 750,000 families living on public estates will get a two-month break in rent payments, which will effectively cancel the 10 per cent rise. So, what the left hand takes, the right hand will give back.
Most will end up paying 0.4 per cent more over the next two years, amounting to an increase of between HK$2 and HK$21 a month. Average rent for the city’s public housing tenants is HK$2,072 a month.
The Housing Authority’s subsidised housing committee, which will meet next month, is almost certain to approve the government’s proposed two-month rent waiver. The government has conducted a rent review every two years since 2008.
Granted, the latest review couldn’t have anticipated the economic impact of the anti-government protests and the Covid-19 outbreak.
Still, Democrat Andrew Wan Siu-kin has a point when he argues that such reviews need to be overhauled to avoid reaching absurd conclusions about raising rents under current economic conditions.
Such number games, of course, are not confined to the Housing Authority. The MTR has a mechanism to calculate when to raise fares. So, management often has to offer convoluted concessions to offset the fare rise to placate public anger.
Such formulaic mechanisms should be used as reference only, rather than strict adherence.