Policy Priorities for the next Five Years
There is still two and a half months to go before he takes office but already our Chief Executive-elect Mr C Y Leung dominates the news cycle, and finds himself knee deep in demands from all sides for action on a thousand fronts.
Let us try to help him focus by spelling out five problem areas which he must tackle, and then suggesting for each specific remedies.
Our property prices are far too high with damaging consequences for the whole community. A price correction is inevitable so the next administration will have to live with it but must try to stay focussed on getting the long term right.
We should reinstate the practice of publishing in advance an annual land sales programme (in parallel with the application list system) and proceed with land auctions at least quarterly. We must find ways to bring more small and medium sized developers into the picture, by including smaller sites or by allowing premium to be paid in instalments. It would be even better if we could switch to a system of smaller upfront payments, and a higher recurrent Government rent.
The HOS scheme is not ideal but is wildly popular, so just do it. If it becomes politically necessary to restrict foreigners’ right to purchase residential property, make it on the basis of a minimum size threshold, say 100 square meters saleable area. Everything less than that should be for locals only.
It is almost unbelievable, but sadly true, that in one of the wealthiest communities in the world we have a poverty problem -- there are people not getting enough to eat and who are poorly clothed. We should not waste time on another poverty commission, rather we should just reach out and grab a solution from someone else’s shelf.
Could something like the American food stamp programme be adapted to Hong Kong’s circumstances? Vouchers work for kindergarten education, could they not also work for basic necessities? How about issuing supermarket vouchers like those credit card customers buy with their points (so there would be no stigma problem when they are cashed)?
Will this be criticised as a band aid solution? So what, first priority should be to stop the bleeding.
The air pollution problem in Hong Kong is a grave threat to public health and the recently promulgated Air Quality Objectives are an insult to the intelligence. Scrap them, and bring in new ones which aim in the long term for really healthy clean air, coupled by a set of aggressive interim targets for 2017.
Make a start by buying out and scrapping all pre Euro buses, and all early Euro marks as fast as the manufacturers can ship new ones.
For middle class families, education is the biggest single expense after accommodation. They pay taxes which provide for educating children in some schools but not others. Where is the fairness in that?
The root of the problem is a system that subsidises institutions rather than children. Change it so that every lawfully resident child in Hong Kong enjoys an equal subsidy irrespective of the school the child attends. Parents should be making these choices, not bureaucrats.
Finally we must address the issue of financial support for the retired. There are many things we can do right now and some of them would cost nothing.
For example, why do we still force our civil servants to retire at 60 (a practice which serves as an example for the private sector to follow)? Fit experienced people are being turfed out when they still have many useful years of employment potential. The life expectancy of our citizens is among the highest in the world yet in Europe and other places where people have a shorter lifespan the age is being pushed out to the late 60s. In the USA there is no longer any retirement age.
The Mandatory Provident Fund as currently operated is widely regarded as a disaster and a waste of money, and by the more cynical as an incredible gravy train for the financial services sector. The half hearted reforms being discussed are woefully inadequate. Start by giving control of the whole account to the beneficiary, instead of just the half he has contributed as is currently proposed. That should result in an immediate and substantial cut in fees, from close to 2% per annum as now to below 1%. That may not sound like much but on a compound basis over 20 years or more it will make a huge difference.
And give two years notice of ending the practice whereby employers can use contributions they have made to cover their long service payment obligations. All the money in the account should be used to provide a retirement nest egg for the employee.
Such an agenda is ambitious but achievable. And the person who can carry it off would be worthy of a second term.