After such a long wait, policy address is bound to disappoint

Submitted by admin on Jan 15th 2013, 12:00am

Business

MONITOR TOM HOLLAND

Tom Holland

Given the unrealistic expectations, Leung may well focus on areas where his actions can bring about immediate effect, such as cutting pollution

Poor old C.Y. I’m sure the chief executive had only the best intentions when he decided to postpone his first policy address from October to January. But by now, he has surely learned the folly of delay. Over those extra three months, the expectations of decisive policy action have risen to absurd heights.

Now Leung faces demands from dozens of assorted groups, who variously expect him to bring down property prices, house the poor, provide health care for the elderly, introduce universal pensions, reduce working hours, improve the city’s education system and either enact or bury equal rights legislation for gays, depending on their bent.

As a result, when Leung stands up tomorrow to deliver his long-awaited policy address, he is certain to disappoint the vast majority of these supplicants.

It seems that C.Y. has decided – probably wisely – not to press ahead with legislation on standard working hours. While improving employment conditions is a worthy aim, it’s doubtful whether the government should really be in the business of telling people how much they should or should not work.

It also looks as if C.Y. will duck universal pensions on the grounds, according to the Sunday Morning Post, that Western countries offering state pensions have run up crippling debts.

This is a bizarre reading of the situation. Part of the reason European countries are in such trouble is precisely because they didn’t plan ahead to finance their old-age welfare provisions, leaving them with huge unfunded liabilities. If there is a lesson to be learned here, it is not to ignore the topic, but to launch a viable fully funded state-backed pension scheme as soon as possible.

Still with two of the main demands off the table, C.Y. is left in dire need of some initiatives with political impact.

On property affordability, Leung could follow Singapore and announce another round of tax rises aimed at deterring investors from buying multiple apartments.

But after the last round of cooling measures introduced at the end of October failed to dent prices, it is doubtful whether further steps to cool demand will much impress Hongkongers priced out of the market.

Increasing supply is another matter, and it is likely Leung will announce new policies to increase the supply of both public housing and building land, possibly by pressing developers to use their untouched holdings of former farming land.

But it will be years before those measures have a real effect on people’s lives, so if C.Y. wants to make a popular splash in the near term, he will have to look elsewhere.

Happily, there are few things he could do in short order to improve the city’s air quality.

Past attempts to cut pollution have centred on offering partial subsidies to bus and truck companies to phase out old, more polluting vehicles, or giving incentives to shipping companies to switch to low-sulphur fuels.

But incentives alone don’t work. Covering 30 per cent of the cost is not enough to persuade a company to change. The government must also impose stiff penalties on those that fail to cut their pollution emissions.

C.Y. could easily do this tomorrow, for example by ordering highly polluting diesel buses off the city’s busiest streets and by announcing regulations forcing ships berthing in Hong Kong to switch to low-sulphur fuels.

The immediate effect on air quality would be appreciable, and the action would go some way to restoring C.Y.’s reputation as a leader who can effect change.

Of course, not everyone will be happy, and some business interests will protest furiously.

But given the unrealistic expectations following the long wait for C.Y.’s first policy address, people are bound to be disappointed anyway. He may as well accept that and get on with doing what he can.

C.Y. Leung could include cutting air quality in his first policy address.

tom.holland@scmp.com [1]

Topics:

CY Leung policy address 2013

Air Pollution in Hong Kong

Unemployment

Property market in Hong Kong

Links:
[1] mailto:tom.holland@scmp.com