Low expectations should spur Leung to aim high

When Hong Kong’s first chief executive, Tung Chee-hwa, took office in 1997, he brought with him a public support rating of 65 points out of 100. His successor, Donald Tsang Yam-kuen, started off even more popular, with a support rating of over 70 points. Leung Chun-ying, who takes over in just over 10 weeks, has a support rating of just over 50 points. He also has a negative approval rate; barely a third of the people polled approve of him, while a bit over half disapprove. Is this a challenge, or an opportunity? The last two leaders failed to live up to the public’s high hopes, and their ratings went downhill during their time in office. As Leung prepares to take charge with such low public expectations, could it be that his ratings have nowhere to go but up? I believe people will judge him by his actions. A warm and charismatic personality is nice, but any politician who demonstrates that he can make life better for ordinary people will see his ratings go up, once people are convinced. Leung and his advisers need to question accepted wisdom and think out of the box. If people perceive a real shift in government policy away from what seems like a bias in favour of the talked-about tycoons, they will be impressed. (One way is to follow US examples by introduction of progressive tax and anti-trust law instead of competition laws that work against small business) One problem Leung faces is that he needs to assure business interests (evil bankers and developers ) that he is not a danger to them (by being a socialist to cut housing price and punish the bankers that controlled SFC). That is why he has been playing down the prospects of serious change – which in turn is probably one reason why many parts of the community doubt he will make a difference. I am more confident. Cynics may assume that the population must bow to the wishes of a privileged minority (1% of the rich ), but I think that is changing. I think the new administration will have Beijing’s approval to shift the current, unequal balance of economic advantages. I also believe that the tycoons and others are realistic enough to accept and adapt to that (as professionals and middle class in HK are fighting back). What sort of things should the new administration question? It is impossible to get away from the issue of land as a source of so many of our problems. The last administration showed great reluctance to free up land supply, even as queues for public housing lengthened, the sandwich class was priced out of the market and rents rose for businesses, especially smaller ones. It also showed no willingness to intervene as low real interest rates and high demand from mainland buyers pushed housing prices up. Its attitude was that there was nothing much the government could do except wait. Leung shows a refreshing ability to think differently on this subject. He and his advisers seem to realise that Hong Kong does not have a shortage of land; the problem is how we use (or don’t use) it. And they must know that there is a serious mismatch between what property developers put on the market and what local people want and can afford. If they can fix that, the public opinion ratings will follow. Another area where the incoming leadership can demonstrate an ability to think out of the box is the subject of government expenditure. In a speech around a year ago, Legislative Council president Tsang Yok-sing asked some blunt questions. Why does government throw billions around on one-off handouts every year? Why do we spend so much less than other developed economies on education and health (should follow Canada examples to turn out more doctors with lower grades students while reserve the higher grades students to technology research)? What is so special about the level – 20 per cent (should be increased to 22-25%) of gross domestic product – that officials see as the ceiling for public spending? Fiscal prudence is a wonderful thing, and most Hong Kong people themselves reject welfare “socialism” and waste. The old government created amazing budget surpluses and huge reserves, but – as with land – it missed the chance to put them to good use. Now Leung has the opportunity. Indeed, many would say he has an obligation, because these things really cannot wait any longer. If he now lets the people benefit – sensibly – from their own city’s resources, he will be the first chief executive to leave with higher ratings than he began with. SCMP Article Bernard Chan