Leung: Act in the Public Interest

SCMP January 13 2013

Now that irrelevant gestures such as impeachment motions are out of the way, it is time to focus on what comes out of Chief Executive Leung Chun-ying's policy address. It should be analysed by legislators for its adherence to the principle that government exists to further the common benefit, not sectional interests.

There are plenty of ongoing instances of the common interest and the economy at large being sacrificed to various vested interests, and public money being wasted on a grand scale.

We can start with the issue causing most concern: land. The intention of the government to make more land available for housing is sincere, evidenced daily by arguments about a few hectares here or there, the relative priority of housing over schools and sports stadiums, and especially for land already served by infrastructure and capable of rapid development.

However, underlying all of the land issues is the gross misuse and underuse of large tracts of the New Territories, thanks in large part to the small-house policy, but also the illegal use of supposedly agricultural land and the grip that a small number of companies and individuals have on large tracts of this. Radical improvement in land availability requires grasping this nettle.

So far, the government has shown scant willingness to take on the Heung Yee Kuk and other interests holding the public to ransom, despite the justice of the case and the public plaudits it would win. Legislators would do well to focus on this rather than arguing over individual-plot use.

Some government misdeeds cannot be undone. But legislators should not forget how much they will cost the people for years to come, and stay alert to the danger of repetition. One is the expected huge hike in CLP Power prices, thanks to a government demand that the company buy piped gas from state-owned PetroChina, rather than have an LNG facility which would enable it to bargain with suppliers. This was a political decision which saddled CLP with an appalling deal, which probably ensures not only a high base price for gas but opaque and possibly arbitrary charges for the costs of transporting it from Central Asia. The one indirect beneficiary will be Li Ka-shing's Hongkong Electric, as CLP's prices will come closer to the much higher levels it charges.

Meanwhile, another of the Li family's near-monopoly companies, PCCW, is turning capitalism upside down. In the normal world, capitalists invest in the means to produce goods and services and then charge the consumers of their products according to what the market will bear. But in the case of PCCW and its high-speed broadband network, the consumers are being asked to put up the capital as well as face yet-to-be-determined usage charges.

Those living in what PCCW determines "less densely populated areas" are to be assessed for contributions to fibre optic installation. The justification for this is not explained. These areas include a large part of Hong Kong Island such as Pok Fu Lam and Repulse Bay. It is not as though there is competition. If the government's sleeping regulator can allow this, perhaps Hongkong Electric can start charging for cables laid to such locations.

As for the government's own spending, the penny-wise, pound-foolish approach is well entrenched. It is too late to stop the Zhuhai-Macau bridge or reduce Hong Kong's share of the cost. But let legislators never forget the absence of clear economic justification for it, particularly as it lacks a rail component.

The cost of bringing the high-speed rail into the middle of Kowloon is an even worse example of officials' lack of concern for the public purse as they seek commendations from Beijing. Other unneeded mega projects, such as the highly polluting Wan Chai-Central bypass, are less the result of politics than departmental ambitions in Hong Kong.

Given the official track record of throwing huge sums into uneconomic projects while huge numbers of old people live in abject poverty, legislators must not give in to the next huge call on public money - the airport extension. The Airport Authority must become a corporation and not live on as a government body pretending to be a commercial entity. As a corporation, it should raise the money for the extension from the market - which is a far better judge than bureaucrats and would impose discipline on an entity accustomed to easy access to public funds. But, then, it might come under the closer scrutiny that officials detest.

As Hong Kong ages, the call on public funds is changing. Yes, the government is rich but provision for the future requires investing in enterprises that can support rising needs for health care and support for the elderly. Bad investment using other peoples' money is as dangerous as it is easy.

It is even easier when the government itself, to please mainland officials, gets away with a proposal to make corruption easier by helping company directors hide their identities. The claim that proposed amendments to the Companies Ordinance are to protect privacy is hypocritical nonsense.

Opposition legislators, please stop barking at the moon and wake up to this and the tangible threats to Hong Kong's prosperity and open society.

 

 

 

 

ends