Rachel Cartland welcomes moves away from excessively rigid fiscal policy but warns against being 'taken for a ride'

There are always some amusing things going round on the internet. A particularly funny recent example was titled "Getting It Wrong Dept" and gave the 25 most extraordinary cases chosen from the past 100 years or so of utterly mistaken predictions from the greatest experts of the day. One might pick out, for example, renowned scientist Lord Kelvin pronouncing in 1883 that "X-rays will prove to be a hoax", or IBM in 1955 telling the founders of Xerox that the market for photocopiers was too small to justify production.

Of course, in many circumstances we must rely on the experts; it would be foolish not to consult a trained doctor in the case of illness or an architect on erecting a building. It is, however, when it comes to "futurology" that, it seems, even the best-qualified may prove unreliable guides. This is why I am very much in favor of Chief Executive Carrie Lam Cheng Yuet-ngor's indication that she will not allow herself to be too strictly bound by the projections of an expert committee appointed by former financial secretary John Tsang Chun-wah which had warned against the possibility of a structural financial deficit by 2022. The problem is not so much whether this will prove to be as inaccurate as some of those other notorious bits of pessimism quoted above but rather that it has led to a chilling reluctance to open the public purse strings, and that in turn has caused otherwise redeemable serious harm to the community.

It has been saddening for former civil servants to feel as if social provisions have been going backwards. Even if there is no doubt that the strategy of fiscal conservatism has been well-motivated the result has been that Hong Kong people seem not as well provided-for as formerly with such basic necessities as housing and medical care. Lam has just made a short trip to Association of Southeast Asian Nations neighbors including Singapore and we cannot but contrast our situation with that of our fellow city where young people look forward to good opportunities. This includes the chance to own a decently sized apartment. Our new chief executive is surely taking the right line in increasing investment in the well-being of our citizens. There may be different views as to the reasons for political tensions within the community but it's important to remember we will never have social harmony unless all social classes feel that they are being fairly treated and that they and their families can expect to see their hard work rewarded. Perhaps even more importantly, the government needs to be seen, through deeds and not mere soundbites that it is striving to build a more equitable society by narrowing our wealth gap.

Our education system is crucial. It stands at a pivot between welfare and economic development. Parents and students want schooling that will allow the talented and diligent to stretch themselves and make the most of their abilities. At the same time, though, our tertiary institutions in particular must be the engines for growth, innovation and invention. We have no stand-alone military which elsewhere is traditionally an incubator for technological advancement with huge positive commercial fallouts. This absence makes the role of our universities even more significant as the likely birthplace of technological breakthroughs.

There has been some talk of ditching the former policy of "positive non-interventionism" but it should be understood that there was more to that policy than the mere provision of regulatory frameworks, important though these are. The seminal document was the 1979 Report of the Advisory Committee on Diversification. This is largely the work of that great public servant, the late Yeung Kai-yin. In its proposals to facilitate Hong Kong's moves away from over-dependence on the textile industry it also covered vocational education, the building of the Hong Kong Convention and Exhibition Centre and many other related topics. It re-affirmed, however, Hong Kong's traditional distaste for direct subsidies to specific companies or industries and there may still be wisdom in that.

Entrepreneurs and civil servants have their different strengths and their different contributions to make. The civil service culture ought to be somewhat risk-averse while businesspeople will want to daringly take any advantage they can. There is a danger that in its eagerness to create a brighter future the government may in effect be taken for a ride and find itself being too generous to those who have grandiose but impractical schemes for making great fortunes. Any subsidy schemes should surely at least start small so they can learn from failures as well as successes, and repeat the latter but not the former.

This is, however, just one small word of caution. Overall, we should be inspired to get behind our new chief executive and her very positive vision for Hong Kong.

(HK Edition 08/16/2017 page8)