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Safeguarding Hong Kong's Business Environment

Following the Policy Address last month, many people started expressing their opinions on the constitutional and economic policies that the Chief Executive spoke on. I, too, expressed my concerns and reflected the business community's views to government, stressing that the business environment must be taken into account before any changes are made to sustain the economic recovery. 

Developments under the constitutional review would obviously affect the political and social environment, which in turn would affect the business environment. As such, I agree with the government's position that the constitutional review must be carefully deliberated to ensure it can be carried out smoothly.

The first step

A number of people have criticised the Chief Executive for setting up a task force to consult the Central Government on the constitutional review process. However, I feel this is an important first step that will help minimise possible future disputes and conflicts. The Central Government does have the last word about any changes affecting the election of the Chief Executive and legislators. As such, setting up a task force to clarify key aspects in the Basic Law at the start of the process will facilitate future negotiations.  

In my view, the SAR Government could, at the same time, start consultations within the community to get a consensus for the Central Government's consideration later on. I believe such a two-pronged approach would enable the government to strike a balance among various parties. Ideally, the constitutional review should be implemented smoothly with minimal disruption to social and business stability.

Regarding economic initiatives, the Chief Executive was also criticised for the lack of "new ideas" in his Policy Address. Critics argued that the only new measure to come out of the address is a reshuffle of the Financial Secretary's committees into a high-level body to streamline procedures and improve regulation to enhance the business environment.

However, I think that contrary to the usual practice of setting out "big ideas" in the Policy Address, the government this year adopted a more practical approach. The economy has been recovering since the Closer Economic Partnership Arrangement (CEPA) and the Individual Travellers Scheme started. To maintain this momentum, the government should focus on consolidating existing measures rather than initiate new, big ones which may obstruct the momentum.

The Financial Secretary's high-level body is expected to help simplify or remove obstacles that hamper business operations -- something that the business community had been calling for years.

Action needed to reduce the deficit

On the whole, I am satisfied with this year's Policy Address. The only shortcoming is that it lacks a detailed plan for resolving Hong Kong's budget deficit. The goal of safeguarding people's livelihood and giving the community adequate time to recover cannot be used as an excuse to postpone reducing the huge deficit, which already poses a threat to the business environment. 

The government recently disclosed that its civil service pension commitments amount to HK$300 billion, a figure that will continue to grow over time. This obviously cannot go on. The government must unveil a comprehensive report on how it plans to rein in this kind of debt, a move that would ease the public's worries.

I was also shocked to learn that the administration owes HK$20 billion to civil servants in unused leave. This means that on average, each civil servant has accumulated four months of paid leave under the current leave mechanism which allows leave to be accumulated. Some civil servants might continue to save up their leave and cash it in when they retire. The cash compensation would be calculated on the salary that they earn when they retire.  

I strongly object to this policy. In the private sector, employees are generally required to use up or cash in their leave every year. If the government had followed suit, it wouldn't have a HK$20 billion snowballing bill hanging over its head. I therefore have requested the government to re-examine this policy to avoid increasing its expenditure and wasting businesses and taxpayers' money. It is not too much to ask civil servants to take all their leave every year. For those who can't, they should be paid cash compensation based on their current salary.

These are just some of the cancerous expenses that the government has to eradicate. I believe that ample room exists for cutting expenditure in all government departments and hope that the Financial Secretary will put forward concrete measures and a timetable to ax the huge deficit in his Budget Address in March to safeguard the business environment.

If you have any comments or proposals on my views, please send them to me directly at, Legislative Council Building, 8 Jackson Road, Central, Hong Kong.
Or email me at tpc@jamestien.com. Tel. 2500 1013, Fax 2368 5292.