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Leung must fix poor government


Philip Bowring says Leung should see that what Hong Kong needs isn’t more, but better, government intervention. For this, he needs to whip the civil service into shape, not coddle it

May 06, 2012

It is encouraging that Leung Chun-ying has an agenda for action after years of stasis under Donald Tsang Yam-kuen. Land, environment and welfare issues appear high on his list of things to be done. Momentum does matter, as does the commitment to clear policies driven by the public interest and not negotiated by reference to the assorted interest groups that populate the bureaucracy and Legislative Council.

Nonetheless, there must be concerns about Leung’s view of a fundamental issue: does he believe Hong Kong has too little government or government which, at the top at least, is insufficiently competent?

It is a crucial question which goes to the heart of the proper role of ministers and senior civil servants.

Much is sometimes heard about the importance of “civil service morale”. Why? The fundamental problem of many civil servants is that they have come to believe in their own superiority as decision-makers. Cocooned in secure jobs and given high pay and status by a colonial regime in return for loyalty, they acquired two tendencies. First, a belief that the status quo worked so did not need change, regardless of changes in the economy and society. Second, an unwillingness to admit to wrong decisions and reverse them. Avoiding loss of face was more important than correcting policies.

The need for stronger political leadership is evident after years of the well-meaning but inexperienced Tung Chee-hwa followed by Tsang, the very incarnation of the bureaucratic characteristics mentioned.

But there is a nagging worry that Leung believes Hong Kong needs more government. That would be the inclination of any party loyalist, and particularly one who chooses the classically arrogant ex-civil servant Fanny Law Fan Chiu-fun to head his transition team.

It has been bad enough that Tsang’s government initiatives in so many areas have been characterised by lots of small schemes that sound good in a speech but involve relatively small amounts of money but large amounts of time (and power) for civil servants. The “My Home Purchase Plan” is one such sop; it pretends to be addressing housing issues when these can only be tackled with consistent policies on land sales for the private sector and the role of public rental housing for low-income groups.

The government does have a major role to play in income distribution, now recognised as a major social problem in itself and one that exacerbates other problems, such as the plight of many elderly and the very low fertility rate. But these are best addressed by direct income transfers, such as old age and child allowances and voucher schemes for school books, than by ones in which the bureaucracy – including social workers – act as intermediaries. Environmental issues are best addressed with a few well-devised and strongly enforced laws.

Leung will also need to have a much clearer idea of the divide between public and private sectors, if money is to be used efficiently and with a minimum of wrangling between the two. The MTR Corporation (SEHK: 0066) is a case in point, lacking as it does any clear dividing line between commercial and social roles. The Airport Authority, which wants to spend more than HK$100billion on a supposedly commercial project, is another. So is the Hong Kong Exchanges & Clearing, the listed but government-controlled monopoly to whose board government-approved yes-men are regularly appointed. Is Leung prepared to be bold and reduce the government’s ownership role or will that deprive him of the powers of patronage clearly abused in recent times?

Leung talks about helping small business and developing new industries but Hong Kong doesn’t need more loan guarantee schemes or subsidies for bureaucrats’ favourite projects. Give businesses clean air and more stable rents and they will thrive. Assure them that the judiciary will not be undermined by bureaucrats and Communist Party faithful and they will come.

If he believes in change, Leung will get to grips with such bloated parts of the government as the Monetary Authority, selling off its commercial operations to commercial banks. Is it not extraordinary that the highly paid executives at the HKMA plan to get into microfinance? It is a sick joke.

Looking for a base for a more viable future pension scheme than currently provided by the Mandatory Provident Fund, Leung should transfer at least half of its surplus to the fiscal reserves, where they belong, rather than being treated as a semi-private fiefdom run by the elite bureaucrats. That these are needed to defend the currency peg is a lie.

Whether he needs to create more separate bureaus is not clear. But he does need the chief secretary or another authority to stop the inter-bureau buck-passing game.

In short, Leung must understand that he needs to make himself very unpopular with sections of the bureaucracy who have had their way for far too long. He needs a secretary for the civil service who will bring accountability to the system.

To take a minor example: should we not be told which overpaid, ignorant official made Hong Kong an international laughing stock by banning the Afghan national cricket team? Or, take a bigger one: why should those, be they ministers or civil servants, who decline to enforce the law out of fear of the Heung Yee Kuk or other powerful interests keep their jobs?

Civil service morale does not need pampering. It needs the opposite.

Philip Bowring is a Hong Kong-based journalist and commentator

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