Analysis and opinion from Editor in Chief, Andrew Work on why business has few friends in LegCo and no one stands for the markets. This may be the most anti-business LegCo yet.
Business: Be ready for bad news. But it’s your fault.
For those concerned about free markets in Hong Kong, there is little cheer from the LegCo elections. Big business, often happy to use government when it suits them (not always for pro-free market positions), will also find little to cheer as the results roll in.
The default setting for almost all parties and independents in LegCo, BPA and Liberal Party aside, is socialist populism. Nationalising irksome companies, standard working hours, and a universal pension scheme are just some of the trending issues where almost no one in LegCo dares say nay.
If business doesn’t have much voice in LegCo, it has only itself to blame. The business community takes a backseat in promoting the value of business and markets, preferring CSR ‘forgive us our tresspasses’ approaches instead of promoting the value of business and markets in society and politics. It allows itself to be politically ghettoised into the functional constituencies as the general population votes for its ideological foes.
The scene for Big Business
While a number of functional seats are, by definition, big business friendly, they do not rule alone on business issues and can be drowned in a Chamber of 70 seats. But even pro-business seats don’t mean votes for business issues. Every representative of a business organisation voted for minimum wage in deference to the Administration. When the time to stand up came, they sat down.
The status of big business then on where the CE’s office and ExCo decide to go, pushed by lobbies (including business), the street, civil servants and their ideas about policy.
The question then becomes what is the path of least resistance for the next Chief Executive? Almost every pro-dem, localist and pro-establishment candidate had strongly anti-business and anti-market elements as key parts of their platform. Venezuelan socialist-style ideas like nationalising companies (like Link Asset Management) featured in many election manifestos. According to the Harbour Times survey on political priorities, much of the political class has the implementation of a universal pension scheme and standard working hours at the top of their priority list. Abolishing the MPF-Long Term services offset is also popular.
With no one with the moral authority of a strong voter base to say nay, the next Administration will find it hard not to answer these demands. The only voices heard from the LegCo soapboxes will be for these policies.
Distinct business communities have meagre representation for their narrow interests. The broader business community doesn’t push its representatives to work together for market promoting measures. Accordingly, they lack the firepower to engage in policy horse-trading with democratic and pro-establishment legislators. Divided, they have no political power to negotiate with other factions in LegCo.
Whither free markets?
Political parties willing to fight for free markets would be for less government taxing and spending and more sensible regulation. Those are legislators are few and far in between in LegCo. The functional constituency system either has seats for those habitually inimical to business and markets (e.g. unions, social welfare) or it drives those in the professions and business constituencies to ask for corporate welfare and handouts in the form of cash grants to appease their voter base. Indeed, not a single elected member could be said to be immune to asking for more government spending for their constituency or pet project.
Among geographically elected members, Paul Tse, the perennial maverick, was the only legislator that voted against minimum wage and is a wild card who will often listen to business concerns and may be the most consistently against new taxes (stamp duties) and labour regulations (minimum wage). It is notable that he is very popular, ranking second in Kowloon East yesterday.
Michael Tien of the NPP and Priscilla “Queen of Rats” Leung of the BPA could reasonably be considered pro-business (pro-markets is another issue). Michael Tien, in particular, is an experienced and thoughtful critic on issues, given his strong background in business. But he will be a lonely figure on the geographical side.
That’s it. Really. The other geographical and superseat LegCo members can be counted on to call for more spending and regulation in practically every instance.
Among the functional constituencies, members can be trusted to look out for their industry, but have little in the way of ideas or power that will much influence the direction of LegCo. Not even the big four Chamber representatives (Commercial First, Second and Industrial First, Second) can be counted on to stand up for business and market ideals against the herd, especially if the herd is led by the Chief Executive.
Little voice for business, none for markets
The business community, through rising populism and being ghettoized into the functional constituencies, has lost its ability to influence the broader electorate. Look no farther than the impotence of those industries keen for a new Copyright Ordinance amendment; Gregory So carried the can alone to LegCo with meagre support from the companies that wanted it.
Business, for the most part, just doesn’t try. This neglect may reflect a broader recognition in the business community that LegCo isn’t that important to their concerns unless it involves massive infrastructure spending. The civil servants help the ExCo to draft legislation that moves through technical committees and up to LegCo with little scrutiny with the exception of major social policies (labour, welfare). LegCo’s attention is elsewhere given its members’ limited resources and their voters’ concerns. It could be that the business community sees the power in administrative bodies, departments and bureaus and focuses its attention in more dimly lit places, avoiding the hurly-burly of public opinion.
That hurly-burly may become even more focussed on anti-business rhetoric. While LegCo may see more independence talk and related antics, a number of anti-business stalwarts, like Labour Party’s Cyd Ho and Lee Cheuk-yan are now free from the demands of LegCo to push hard for the adoption of left-wing ideas in Hong Kong. They are experienced campaigners who may find themselves invigorated in returning to street campaigns to advance their ideas, liberated from committee meetings and quorum calls.
Ignore elections, lose Hong Kong
If the broader business community doesn’t rally around and promote a pro-market message in the future, it may find the general population turning against it over time. Chief Executives, civil servants and LegCo alike may become aligned on a generally anti-business philosophy where more regulation and higher government spending becomes the natural order.
When that day comes, the LegCo election of 2016 may be later viewed as the canary in the coal mine marking a broader shift towards a very different Hong Kong. One that does not love business or entrepreneurs or markets. When that Hong Kong manifests itself in pervasive anti-market policy that destroys jobs and our economy, the business community will have no one to blame but itself.