Those looking for a New Killer Star policy in this address might have left disappointed, but there was a mix of Modern Love for key political supporters and All the Young Dudes the CE needs for re-election. The Rebel Rebel faction in LegCo weren’t impressed and were ejected early, having to watch the Changes announced from their offices.
CY Leung is looking to the future – his re-election future and Hong Kong’s future – with this year’s policy address. While theoretically he must keep two masters happy, the ‘people of Hong Kong’ master is represented by the Election Committee. Their other representatives, the geographical seat holders in LegCo, are mostly pan-dems cast in the role of irrevocable opponents. Many of those chose their moment to make a fuss and get the boot.
Beijing, the four sectors and the general population needed to be kept happy, or at least off the streets.
At Harbour Times, we took the approach of avoiding reporting on the content that was reviewing history or re-announcing old policies in progress. For a bulleted summary of new content, check out the hashtag #policyaddress2016 at https://twitter.com/harbourtimes
For our review of what business asked for and did, and did not, get, click here.
This is not America
Contrasted with the soaring rhetoric of the American State of the Union on the same day, the Chief Executive’s Policy Address was a specific, mundane affair appropriate for a city-state. Much of keeping people happy was avoiding flashpoints. For Beijing, that meant keeping mum on missing publishers, freedom of speech, democratic reform and university governance. Enthusiasm for AIIB was expressed; the American-led TPP was ignored. For the business and business related communities, with about 450 of 1,200 votes in the Election Committee, Standard Working Hours and the long-term severance pay offset against MPF were given a pass.
There were no new major infrastructure plans announced, giving environmentalists little new to complain about. Indeed, some were thrilled with the announcement that the government would move to completely ban ivory trading. Given the government’s PR problems with runaway infrastructure costs and delays, Mr Leung was content with announcing new plans to strengthen cost control. Better late than never one imagines.
Of course, many weren’t happy with the omission of mention of their pet projects like a Universal Pension Scheme, but most of these projects are old news and as Gordon Downie says, “No one’s interested in something you didn’t do.”
A number of business priorities were neglected, like the HKGCC’s suggestion regarding two-tiered taxation, but such things are better left for the budget and the community is likely waiting for Mr Tsang’s turn at the podium next month.
Beijing is all about messaging and its move to position itself as a world power, the ambiguously grand “One Best, One Road” (OBOR) initiative, was generously recognised through the positioning of any external policy being tied to the national priority.
Everything from student scholarships to supporting professional services were tied to OBOR. It is a time-tested political manoeuvre to take tactical political spending and cover it in the Stardust of a grand political strategy. Think of malaria nets to promote third world healthcare being re-labeled as ‘climate change mitigation’ measures to meet international political commitments. OBOR labelling ticks a box with Beijing, but doesn’t put undue strain on the budget or create (much) new bureaucracy.
The business community got little in the way of improvement in the general business climate, but a smattering of corporate welfare measures including $100 million to train people in the insurance and asset management industries – industries that spend far more than that on training and where the people and companies reap massive benefits. Approximately 54 Election Committee votes apply here.
The ‘creative’ industries continue to benefit from the taxpayers’ involuntary generosity with more money for the movie industry. Developers may be on the hook with a strange requirement to include more cinemas in their projects as a lease condition. Having local media moguls onside is useful when celebs are needed to promote government pet projects.
All the Young Dudes
Students of all ages profited – and some parents were no doubt happy – with the dramatic move to increase subsidy for up to 80% of kindergarten places, one of a number of measures to improve access to kindergarten. Scholarships for Hong Kong students to attend mainland universities ticks the ‘pro-China’ box, but may be less welcome than more funding for places in Hong Kong schools as many young people may not see the benefits of education in smoggy, freedom-lite Chinese cities.
Younger people will also welcome the intent to increase the free WiFi across the city from 17,000 spots to over 34,000. It raises the question of how the telecoms companies will respond if too many people can get around using VOIP telephony, leading them to ditch their telephone or data plans.
Many criticised the CE for digging in the minutiae of spending for more benches at bus stops stops and bigger bathrooms in Housing Authority flats. But the population is aging, meaning the voter base is going along with it. For retirees on a fixed income from the government or otherwise, economic performance and development matter less than stifling scary instability (i.e. protests), rising costs and easing the small indignities and pains that come with age. Having someone speak to the things that matter in daily life is popular with these voters and their numbers increase daily.
Measures to strengthen support for those with dementia, those without housing or extending funding for free flu shots (annoying for the young, sometimes fatal for the elderly) speak to the really scary things and are sensible vote winners for a politician who is looking beyond street protests – and has deep-sixed the idea of a universal pension.
If the CE was rebelling against anyone, it wasn’t Beijing, as articulated above. Developers, property owners and property agents could find no love in the clear messaging around the CE’s view of the government’s relationship to real estate:
“While, it is the Government’s responsibility to provide land and public housing to cater for the housing needs of the public, it is not the Government’s duty to ensure that property prices can only go up.”
Doctors seem to be in the firing line as the CE made clear this is the year the Medical Council will have to accept four more non-doctors among their ranks to improve “the MCHK’s mechanism for complaint investigation and disciplinary inquiry.” In the same breath, it indicated it would move to make it easier for more foreign trained doctors to come to Hong Kong. If their 30 votes in the Election Committee are lost, so be it.
For the general public, there was little in the way of a thumb in their eye. More money for mainland students and other OBOR to come to Hong Kong has been castigated by pan-dems and localists. While their votes are lost to the CE anyways, minimising the aggravation here will ideally keep protesting at its current level.
One area that may provide some aggravation is charging for garbage. While most haven’t noticed the strong statement of intent to move forward, people will object when it is implemented and the bill arrives. Surprisingly, green groups have been dead silent on this issue, even given they have been asking for it for years. They know people are going to object to the monitoring and cost when it comes.
The CE also depends on the love of other non-government groups in his plans. The Airport Authority and MTR will supposedly launch academies to support their industries. The MTR’s flat building plans are included in his projections for housing. Supposedly arms length from government, the CE seems pretty confident in including them in his plans, raising questions about their (limited) autonomy.
The Community Care Fund (CCF) is supposedly not part of the government so on multiple occasions, it is “invited” to “consider” funding projects for persons with disabilities to support them working, provide grants to needy families for kindergarten until its new programme kicks in, and sponsor anti-cervical cancer vaccines for teenage girls in low-income families. It would be a shock if the CCF hadn’t signed off on these programmes in advance of the Policy Address drafting. This is a way for the government to take care of stop-gap measures and trial run projects that could be included in government spending later.
A modest policy address was probably advisable given the pressure the government is under from everything from missing publishers and 1C2S concerns, lead-in-water issues, infrastructure delays, labour wars, the rise of localism, university unrest and many many other problems. All of these were studiously ignored, but at least not aggravated, in this policy address.
John Tsang, next month, will come under fire if PWC’s prediction of a $95 billion surplus comes true. Every special interest group will demand its cut, perhaps only to see it disappear to cover the costs of unpopular over-budget mega-infrastructure projects.
Given the trying circumstances, it is Little Wonder that the CE didn’t trust his Policy Address to Absolute Beginners, but let old hands make modest nods to the Fashion of the day, IT and OBOR. Nobody is Dancing in the Street over this policy address, but at least they aren’t protesting.
For those asking, Where are We Now?, the answer is probably exhausted with grand gestures and in for no mood for Heroes. Given the state of Hong Kong, it was probably the best, politically, that could be done with this policy address. On to the budget in February.