HONG KONG - This city's financial secretary - John Tsang Chun-wah, who earns nearly US$500,000 a year - has reached out to its hard-pressed middle class, describing himself as a sympathetic member of their increasingly frustrated ranks.
Speaking recently on a popular radio program after delivering a budget blueprint for the city that thrilled virtually no one - rich, poor or anywhere in between - Tsang said that one's lifestyle, rather than his or her income, is what determines class, adding:
I have read articles that say the middle class are people who drink coffee and like French movies. I like movies and tea, so there's not much difference with the lives of the middle class [and mine].
If Tsang thought remarks like these would endear him to Hong Kong's so-called "sandwich class" (which the financial secretary
has apparently mistaken for some sort of cinephile and croissant brigade), he was sadly mistaken. Indeed, such comments only go to show how far removed Tsang is - as well as his equally well-remunerated fellow ministers - from the concerns of ordinary Hong Kong residents, many of whom live in overpriced shoe-box apartments, not the free luxury housing that is one of Tsang's many perks, and travel on trams and buses rather than in expensive, government-purchased, chauffeur-driven cars.
Moreover, instead of heading out for a cup of coffee and a French movie, these cash-strapped folk increasingly dine in and watch television in the local dialect, Cantonese. Keeping up their French somehow rates a low priority.
Unfortunately, it is not just Tsang's off-the-wall verbal gaffes that are landing him in hot water; for a growing number of critics, his budgets of the past five years have amounted to a perennial exercise in blunder and miscalculation.
The bizarre Tsang budget pattern has been to predict multi-billion Hong Kong dollar deficits for the city only to later reveal huge surpluses that have topped HK$70 billion (US$9 billion) (in a city of some 7 million people) and then to hoard that excess cash rather than use it to secure the long-term future of the city - in housing, education, health care and social services.
Of course, it is wrong to place the blame for the woeful dearth of new ideas in this city solely with Tsang; the lack of creative thinking has become symptomatic of Hong Kong officialdom from Chief Executive Leung Chun-ying on down. Maintaining the increasingly unacceptable status quo seems to be the chief aim of Leung and his ministers, who prefer to tinker and adjust rather than aggressively tackle and truly change what is wrong with the city.
But Tsang is the one with his fingers on the purse strings, and thus his annual budget serves as a prominent symbol of the city's administrative inertia.
The Tsang years have been marked by a startling contrast: an embarrassment of riches in Hong Kong's coffers but a paucity of fresh ideas among its leaders about how to plan for the city's future - which includes, as in the rest of the developing world, an rapidly aging population, not to mention no viable pension or housing scheme.
To his credit, Tsang established a "working group" of academics and experts to study the fiscal problems presented by an aging population, but that group should have been called together years ago; now it is time to act.
Meanwhile, other social and economic challenges mount. According to the Hong Kong Council of Social Service, 17.1% of the city's population is living in poverty, and an unconscionable 32.7% of the elderly are poor.
The city's famously low-tax regime (and no tax on corporate dividends) may make it an attractive home for some of the richest tycoons in Asia (including the wealthiest Chinese person on the planet, Li Ka-shing, chairman of Cheung Kong Holdings and Hutchinson Whampoa), but - along with the growing poverty rate - it has become a recipe for one of the largest wealth gaps in the world.
Against this backdrop, Tsang delivered his totally predictable, wholly unimaginative budget on February 27. As usual, it was long on caution and completely devoid of vision, even though Hong Kong's official miser-minister could boast that he was sitting on a US$8.4 billion surplus, which he could add to the US$8.6 billion surplus that he socked away last year.
Hong Kong's fiscal reserves now stand at a record US$94.6 billion while its economy is expected to grow by as much as 3.5% in the coming year. This would appear an opportune time for a stroke of financial boldness that could go a long way toward diminishing that shameful wealth gap, reducing poverty and making Hong Kong a more livable city for everyone.
Instead, however, the financial secretary has opted, once again, to save his massive surplus for "a rainy day" - even though it would require a flood of biblical proportions to wipe out Hong Kong's overabundant reserves. At present, Tsang has stashed away enough cash to keep the city running for nearly two years with taking in any additional revenue.
Last year's initial budget announcement was greeted with such widespread dissatisfaction that Tsang amended it shortly thereafter to grant every permanent resident of Hong Kong the equivalent of a US$775 handout. Of course, people happily took their money, but they also noted the lack of discrimination between rich and poor, the lack of understanding of the city's fundamental challenges and the lack of vision for its future.
This year there was no such handout, but there were the usual one-off sweeteners offered in a bumper annum, this time amounting to US$4.3 billion in relief measures, subsidies and rebates aimed at the poor and the middle class. But, for the most part, these measures add up to a bribe to the people of Hong Kong to endure yet another year of incompetent leadership whose only plan for continued revenue growth is to sell land to ruthless property developers, who then use that land to build housing that most of them cannot afford.
Neither Tsang nor anyone else in the Hong Kong administration has the courage or the clout to break the hold that these developers (Li among them) have on Hong Kong. The chief executive, Tsang and other ministers concoct plans to appease the people - but, in the end, they serve the developers.
Until that relationship - the disaffected might call it business-government collusion - changes, then Hong Kong's economic and social divisions will only worsen.
"I think I do understand the middle class," Tsang responded to his budget critics, "because I am also middle class."
But surely not even he believes that.
Kent Ewing is a Hong Kong-based teacher and writer. He can be reached at email@example.com Follow him on Twitter: @KentEwing1
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