Using sociologist Max Weber’s theory, the people of Hong Kong can be categorized into four classes: the billionaires, the upper middle class, the lower middle class and the grass roots.
Obviously, the lower middle class has turned out to be the biggest beneficiary of this year’s budget.
For example, a married couple with a total monthly income of HK$100,000 (US$12,870), who live in their mortgaged home worth HK$8 million, and who have to support their retired parents, enjoy an awful lot of sweeteners, such as tax rebates, a rates concession for the entire year and a rise in dependent parent tax allowance, which can roughly save them HK$13,000 a year.
To sum up, Financial Secretary John Tsang Chun-wah has adopted the time-proven doctrine of returning wealth to the lower middle class by providing tax allowances to motivate them to work harder and facilitate upward mobility in our society.
His rather conservative and “play-it-safe” approach to public financial management may have earned him some popularity among the public, but the fact that he didn’t pull off any monumental or ground-breaking policy initiative throughout his nine years in office makes him arguably one of the most mediocre financial secretaries in the history of our city.
In comparison, his three predecessors left behind important legacies that have far-reaching implications for our economy.
For example, Henry Tang Ying-yen, who served as financial secretary between 2003 and 2007, boldly abolished estate duty and enhanced the implementation of the Closer Economic Partnership Agreement with the mainland, bringing long-term benefits to our economy that can still be seen today.
Then Antony Leung Kam-chung, who briefly served as financial secretary between 2001 and 2003, before resigning amid a scandal regarding tax avoidance on the purchase of a Lexus, was instrumental in jump-starting the economy after the epidemic of severe acute respiratory syndrome, streamlining the government bureaucracy and easing the budget deficit, all of which have far-reaching implications for our economy even to this day.
And of course there was Donald Tsang Yam-kuen, who occupied the post from 1997 to 2001. Tsang’s epic counter-offensive against hedge fund speculator George Soros in 1998 is alone enough to earn him a place in history.
In contrast, however, John Tsang seems to have little to show for himself in terms of a long-term contribution to our economy.
Perhaps he will only be remembered for giving out sweeteners in his budgets and making the “unprecedented” HK$6,000 cash hand-outs in 2011.
No wonder some in the political circles say even though John Tsang might have proven himself to be up to the job as financial secretary, and is highly regarded by Beijing for that reason, he hasn’t really undergone a serious stress test.
This article appeared in the Hong Kong Economic Journal on Feb. 25.
Translation by Alan Lee
[Chinese version 中文版]
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