Saturday, 26 February 2011

Giving the Budget Thumbs Down

A group of protesters were out marching in Central today, voicing their discontent with Financial Secretary John Tsang Chun-wah's budget speech that came down on Wednesday.

Financial Secretary John Tsang Chun-wah
They were very unhappy with Tsang's handouts which were only short term gains for Hong Kong residents which did hardly anything to alleviate the financial burdens of the middle class or narrow the gap between the rich and the poor.

Many complained about the HK$6,000 ($770) put in every working person's MPF or mandatory provident fund account as they couldn't access the money now, but only after they retire. Tsang explained giving people cash handouts would exacerbate inflation, but academics said it would not have such a big impact.

While the government proposed making more land available for 30,000 to 40,000 private apartments, these wouldn't be available until at least five years down the road. People need affordable places to live now.

Also the government has accumulated so much surplus money, estimated at HK$71.3 billion and reserves at HK$595 billion, that people believe the government has more than enough and should spread the wealth around, or at least help the most needy. There are some one million people in Hong Kong who live on HK$100 a day and some benefits for them would help them live slightly easier lives.

Perhaps the only good thing about the budget was raising the tobacco tax to HK$10 a pack of cigarettes so that smokers now have to pay about HK$50 a pack, an over 40 percent increase. Hopefully this will persuade more people it's no longer economically feasible to light up, but it may turn others to illicit cigarettes.

Because people are so unhappy with this budget, Tsang's popularity plunged 15 percentage points at 36 percent, only slightly higher when he took up the post in 2007.

Why this short-term thinking? Why not think of ways to stimulate the economy? Rents are so high it's practically impossible for young people to set up their own businesses or for entrepreneurs to execute new ideas without taking on heavy financial risks. What about more social programs for the poor, or helping young people without university degrees with job training or education? And what about putting more effort into cleaning up the air pollution in the city?

While the government keeps such high reserves in case of another financial meltdown, it surely can spare some money for the less fortunate. Why not encourage hope and opportunity than pessimism and greediness?

1 comment:

  1. why not spend the money to develop low-cost housing?? this is the most urgent social issue in hong kong.