What's New, Press Release | February 24th, 2011 |

Press Release

Blind to Conflicts, Sheer Accrued of Grievances PC’s Response on the 2011-12 Budget Speech

The Professional Commons (hereafter PC) is of the view that the Budget this year is nothing but a mere repeat of what the government had done in the past few years. As the “sweeteners” are given away on a one-off basis and are not aimed at bringing a higher degree of fairness, it could only address public aspiration of a fairer sharing of economic prosperity on a limited scale, not to mention attempts to deal with local deep-rooted problems by capitalizing on the abundant fiscal reserve. In the light of this, there is growing grievances in a midst of grassroots and middle-class, in which an exacerbation of social conflict might endanger the stability of the next administration in the long run.

1. Fair Sharing of Economic Prosperity

Given that the Transport Support Scheme has not been passed by the Legislative Council, there is no specific account on respective arrangement in the Budget. In fact, the employees receiving minimum wage could receive an addition of 624 dollars per month if the statutory payment level increased by three dollars per hour. By doing so, it would not be necessary to introduce any government-sponsored transport allowances at all. It should also be highlighted that the support scheme is not fair in the sense that current expenditure accordingly will be out of taxpayers’ pocket at large rather than employers’.

As the Government has only paid lip service on the issue of narrowing the rich-poor gap, PC suggested last year the goal of reducing Gini Coefficient from 0.533 (2006) to 0.476 (1991) by 2017. By virtue of such a higher-level policy objective with specific indicators available, it could provide a clear directive for respective policy bureaux and government departments in the course of policy formulation and implementation.

PC is of the view that the Government failed to put in place effective measures in order to enable the employees to enjoy a greater share of economic prosperity. Most of the benefit and subsidy provision are short-term or one-off in nature and even worse are by no means a strong measure aimed at narrowing the rich-poor gap. The high sounding principle of “Big Society Small Government” highlighted in this Budget is in fact an empty talk.

2. Issues on Housing

Foreign capitals, in particular investments from the Mainland into the local property market, have brought about extra substantial demand on housing. An increase in land supply, as distant water, cannot quench the present thirst as it takes a few years before the augment in supply can be converted into real market supply. Further, future completion of private flats suggested by the government is far from reliable as, according to statistics, only 10% of which have been sold in the first year of their completion. In this connection, flats newly completed do not necessarily become the real supply. In view of limited supply of private flats, the difficulty in home ownership would be intensified and the rental be skyrocketing.

To respond public grievances on home ownership, the Budget is committed to conduct more land sales in a bid to increase housing supply. However, the Government should face up with one more question, i.e. disinterest of developers in building low/medium-cost flats that is in unison with their intention to “build less earn more”. In the light of this, PC suggested the resumption of HOS and 8,000 flats should be built every year in a bid to effectively address the imbalance in property supply in response to public consultation on subsidizing home ownership last year.

3. Shortage in Supply of Commercial Flats

In view of the rampant rental costs of Grade A commercial buildings at present, the Financial Secretary’s commitment on increasing respective supply is regarded too far from the pressing situation. More importantly, he showed no intention to rectify market speculations through making an account on short-term supply of commercial flats. Simply put, the Financial Secretary fails to put a chill over the existing rampant price of commercial flats.

In fact, it is believed that certain amount of commercial flats would be returned for commercial purposes in the wake of the relocation of policy bureaux and government departments to the new government headquarter, including floors in Admiralty Centre/United Centre, as well as those in Citibank Tower rented by Department of Justice and the Legislative Council respectively.

If such tense situation persists, the Financial Secretary can even instruct the Hong Kong Monetary Authority to move into the West Wing of the old government headquarter, therefore leaving offices in ICC phase 2 (totally 14 floors) for lease or for sale. Such an arrangement could help increase the asset return on one hand and reduce administrative costs on the other hand, therefore saving taxpayers’ money of considerable amount. As an alternative, the Government can also consider a suspension of demolition of the Murray Building and transform it into commercial use for a period of ten years.

In fact, PC has once suggested relocation of more government departments to the New Territories. Such maneuver in land usage would be useful in paving the way for regional economic development in New Territories, then creation of more job opportunities on the one hand, improvement in traffic flow during commuting hours and mitigation in burden of living on the other.

4. Limited Increase in Subsidized Undergraduate Places

As reiterated, inadequate forceful measures for manpower cultivation belies government’s empty slogan underneath its avowed development of knowledge-based economy. To respond, government’s promise to increase 500 subsidized first year undergraduate places is at best a drop in the bucket that is far from enough to deal with new challenges concerning the need for development of knowledge-based economy.

To enhance the quality of our workforce, it was suggested by PC last year that substantial increase in subsidized undergraduate places is necessary in which, as a mid-term goal, all Form Seven students fulfilling the minimum university requirements should be able to pursue tertiary education. To this end, the Government is advised to initiate an increase of 3,000 subsidized undergraduate places to facilitate the multi-faceted development of the knowledge-based society. The tertiary institutions should provide more diversified courses and allocate their undergraduate places accordingly.

5. Establishment of the “Citizens’ Account”

The “five-nil” citizens are unable to be benefited by the relief measures, such as electricity subsidy and waiving of rates in the past few years, given that these measures do not abide by the principle of fairness. The crux of the problem is that the Government has not put in place an effective “infrastructure” to facilitate wealth redistribution. It should be considered that the proposed injection of funding into the MPF account of individual citizens is by no means effective in addressing the need for retirement protection. As highlighted in our 2008-09 budget proposal, for the sake of post-retirement life of citizens and their self-fulfillment desire for different stages of life, it would be advisable to establish a “Citizens’ Account” for every single HK citizens, in which the government should inject certain portion of fiscal surplus in good years.

Once “Citizens’ Account” has been established, it would be more flexible for the government to benefit citizens from different walks of life with a fairer distribution of “dividend” of economic prosperity. Unfortunately, the Government refuses to think outside the box but instead injects funding into MPF account of individual citizens, therefore not catering to post-retirement needs of those who do not have a MPF account.

The Professional Commons

24 February 2011

Contact persons: Mr Albert Lai (9125 6505) ; Mr Charles Mok (9195 5156)

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