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Hong Kong: Budget report: university students on sale!

Financial Secretary of Hong Kong John Tsang made the budget speech for the fiscal year 2009-2010 at the Legislative Council on 25 of February. This is the first budget report after Hong Kong felt the pain from the downturn of global financial crisis. Unlike other areas, our government's finance remains strong. It is estimated that the government will still have a surplus of 18 billion HK dollars (2.32 billion USD) in 2008-2009, and will only have a 3.99 billion HK dollars (500 million USD) deficit (equivalent to 2.4% local GDP) in coming fiscal year. It is expected that the government is equipped to fight the crisis better than others, but when the budget came out, many criticize the government for being a miser in its spending, especially in time when people need real help, and that our financial secretary's salary is higher than the US president Obama.

A miser's budget

Brian Fong pointed out that when compared with Singapore, Hong Kong government is not spending enough to deal with the crisis:

赤字預算規模僅為399億、佔本地生產總值2.4%,相對於香港面對的嚴峻形勢,救巿力度明顯不足,與競爭對手新加坡相比(赤字預算佔生產總值的6%),更加顯得政府欠缺魄力;同時,政府明顯未有善用儲備,預算案估計下年度的儲備仍然高達4,481億港元、相當於18個月政府開支,明顯高於政府自己定下「儲備應相等於12個月開支」的準則,反映政府並未有效運用手頭上的子彈來振興經濟、挽救衰退。

The deficit budget is only 3.99 bilion, which is equivalent to 2.4% local GDP. In time of crisis, this is not adequate to save the market. And when compared with our competitor, Singapore (their deficit budget is equivalent to 6% local GDP), our government lacks the will and ability. Moreover, it is obvious that the government does not know how to spend its reserve, our reserve is still up to HKD 44.81 billion, which is equivalent to 18 months of the government expense and much higher than the principle of “having reserve equal to 12 month government expense”. It shows that the government is not effective in spending money for rescuing the economy.

While Brain Fong looks into the budget from a macro and accountant perspective, other concern more about its actual implication on people's livelihood. It seems that the “sweets” that given out taste sour or even bitter to many:

Cheong from Citizen radio pointed out that the so-called HKD 6,000 (USD800) tax rebate is a trick:

曾俊華表示,以六千大元為上限退稅,但看看細節,原來要年薪九十萬才會退足六千大元稅,假如你只有二十萬年薪,即一般約一萬多元上下月薪,你只可以退到四百六十元稅,而且不是以支票退稅,而是在下個稅季中扣減,擺明當香港人老襯

John Tsang said the upper limit of the tax return is HKD 6000, but if you look into the details, only those who have an annual income of 900K can get the 6000. If you only have 200K annual income, which is around 10K per month, you can only get HKD460. Moreover, you won't get a rebate check, but a tax reduction in the next taxation season. This is a trick for cheating ordinary people.

University student on sale at HKD4000!

As the unemployment problem is getting worse, preserving job is considered the most crucial task. John Tsang decides to put the university fresh graduate on sale with a subsidy plan. However, many people worry that the policy will distort the job market as it allows corporates to pay university graduates as low as HKD 4,000 (a bit more than US500), in which HKD 2,000 is government subsidy. Ping Sim is very frustrated about this:

這一個應屆大學畢業生實習職位津貼計劃,本身來得並不突然,因為當局早於一星期前便已開始「放風」了。不過,包括筆者在內的普羅大眾,當時的著眼點主要只是認為偏坦應屆大學畢業生,並對其他待業人士不公平。筆者也曾因此撰寫了一篇《單保應屆大學畢業生就業做法不公》力陳反對理據。相信當時大部份人都不會想像到,原來這個津貼計劃並非「優待」應屆大學畢業生,因為其月薪竟然只有四千元(企業與政府各出二千),低於就業市場上絕大部份的職位薪酬。筆者原先還以為,企業需要以不低於市價(以現時市況應該也有七八千)聘請,然後政府津貼其中二千,企業仍須付出不少於五六千。殊不知政府是否怕企業不願意響應,竟然只要求企業每月付出二千(比外籍家庭傭工的最低工資還要低),便可聘用大學生,很明顯就是偏坦企業,讓它們享用高學歷的超廉價勞工。

The fresh graduate university internship subsidy program is not a surprise as the government has released the information a week ago. At first, the public, including me, felt that the government was giving too much favor to university students and being unfair to other people. That's why I wrote an article against the policy. We could not image that the program is actually not favoring university students, it turns out that their salary is suppressed to HKD4000 (the corporate and government are paying half and half). Such salary level is much lower than most of the jobs in the market. I thought at the beginning that the corporate had to pay the university intern according to the market (which should not be lower than 7-8,000), government subsidizes 2000 while the corporate pays the remaining 5-6,000. The government probably worries that the corporates are unwilling to join the program and therefore requests the corporate to pay 2000 instead (which is lower than migrant domestic helper's minimum wage). This is a favoritism towards the corporates, they can get university students with extremely low wages.


Facebook: Hong Kong Financial Secretary deserves HKD4000/month only!

In the facebook, several groups have been set up to protest against the policy. The most popular one is Hong Kong Financial Secretary deserves HKD4000/month only!

The group recruited more than 2000 members in the past 3 days. And its statement said:

Since Financial Secretary can't get his job done(the reasons as below)
We are now hoped that he should have a internship on how to be a good Financial Secretary and receive $4000 subsidy monthly, until he knows how to get his job done.

1.Can't realize the difficulty of the people
e.g: Government has little method to help the middle class, because government expected they can help themsleve,for example, they can get money by mortgaging their house or using their own saving.

2.Contradiction
e.g:He refuses to reduce his salary and said that it is a “show” only. However, the government officers always do their “show in the street.

3.Making lose-lose situation
(Subsidize the internship for university graduate,employer can employ the degree holder with very cheap salary.Also, the competition edge for non-degree holder will be lowered. Both degree and non-degree holder lose.)

4.Suspicion of Conflict of Interest
(Both liquor and cigarette are harmful, yet he increase the cigarette tax by 50% and eliminate the liquor tax. He loves red wine and it is reasonable that it is Conflict of Interest)

5. (Advertise on TV to collect the opinion of Governemtn Budget, yet the outcome disappoint everyone.

6.Bias
(Chinese opera receive huge amount of subsidy from government, other art /culture field doesn't.)

7.Nonsense
(He said that jobless White-collar worker shouldn't expected to work as White-collar job. He don't realize that if they do blue-collar job, the problem is just shift to blue collar worker.)

8.Double standard
(Someone asked him why would he receive the salary higher than US President Obama (He:3.8m/yr Obama:3.1m/yr), he explained that it is a different issue and unable to be compared.
However, when he explain why the salary of graduate internship is worth $4k, he said that his first internship in US has no salary, he use the pocket money from his mother. Hence the graduate can get $4k is already better than him)

There are more than 100 wall posts in the group, most are frustrated comments, like this one (with my translation note on Chinese term):

This is another ” 8萬5″ (translation note: 85 thousand refers to the housing market policy of the former Chief Executive Tung Chi-wah, which distorted the market during the last financial crisis after 1997)…… Another time the government wrongly price the society's asset, another time we are suffered as 負資產! (translation note: negative-equity)…. Obviously not only the local university students/ graduates suffer, the overseas ones (You too! you no longer worth as much as before. The norm changed), the sub-degree holders, the grassroots, the cleaners and guards working downstairs, and every manpower in HK too (the norm changed right, we've got price-cut, you've got price-cut too), EXCEPT THOSE WORKING FOR THE GOVERNMENT APPARENTLY…. because the government never has a sense of how things outside 政府合處 (translation note: central government office building) is doing! They never put themselves as the ruling ones and never thought they have so much influence on how the marketer's perception! If they think they got no influence to the society, why the hell we pay tax and let them in the ruling chair! DOWN DOWN 4-TSANGS!

Smokers are even more outraged as the cigarette tax has increased by 50%. Kahui complains:

D煙稅一加就加五成,現在基層打工仔搵工又難,

有份工又驚冇得撈,想食支煙減下壓,但係個仆街政府就加稅,重重甘加稅,

食都冇得食,想唔窗口當門口都唔得!

自己啲高官飲既紅酒稅又唔加!

月薪幾十皮,自己飲酒又可以省幾皮,

你哋玩Q哂佢啦仆街!

幫助大學生每人二千,

重話唔會有公司藉此炒人,

你話呀?你點知唔會有公司咁做呀?

炒咗係咪你請番佢哋先?

The cigarette tax has increased by 50%, it is so difficult for the grassroots to find job…
Even if you have a job, you are worried about getting fired soon. Well… you want to relax by having a cigarette, but the fxxking government rises the tax, and so heavily!
Got nothing to eat / smoke, we can only walk through the window instead of the door! (translation note: meaning kill oneself)
Why don't the government officials rise their wine tax?
Having so high a salary and enjoying cheap wine.
You pay the game by yourself, sxxker.
Helping university graduates with 2000,
And be so sure that companies won't fire other employees.
How do you know?
If they got fired, are you going to take them in?

Among the political parties in the Legislative council, probably only the League of Social Democrats could show the grassroots’ frustration by interrupting John Tsang from reading his report (see the youtube here):

However, their action has been criticized by the government, pro-establishment politicians and the pan-democratic alliance. Dadazim, a journalist comments that LSD can attract grassroots support more than the pan-dem's “rationalists”, even though it is a sign of despair towards local politics:

LSD的定位像樂擅的獨立樂隊,從來不需討好大多數。關心香港政治的人,一直看著這個政府能力之低下、表現之硬膠、態度之囂張,如何理性?投票給 LSD的選民並不盲目,只是看清楚了大局的無力,社民連越受支持,越反映民間無力。民主黨理性務實講道理講了十數載,有甚麼結果。合作是死、叛逆是死。朱門出來的達官貴人,哪看到路有凍死骨?

看LSD三子兜口兜面爆曾俊華,雖行禮如儀,卻也增添一點娛樂性。基層從來自求多福,對不知貧苦的高官從來沒有期望。看著曾俊華被爆到一臉面懵,你不能否認不少基層很愛看。

LSD's position is like indy music band, they don't need to please the majority. Most people who concern about politics, seeing the government so incompetent and arrogant, how can they stay calm and ration? Those who vote for LSD are not bind, they just understand that they won't be able to make change within the existing institution. The more support LSD gets, reflecting the more helpless local people feel. The Democratic Party has been very rational in the past decades, what is the result? You are dead either being cooperative or subversive. The rich politicians could not see the dead bodies along the road.

Seeing the three LSD guys scold at John Tsang, it is rather entertaining. The grassroots can only depend on themselves, they seldom have expectation on the government high ranking officials. You can't deny that many grassroots would love to see John Tsang's stunned expression.

1 comment

  • […] Hong Kong, Oiwan Lam of Global Voices has written a post about the controversial subsidy plan of the government for university graduates looking for work: As the unemployment problem is getting worse, preserving job is considered the most crucial task. […]

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