Gini's out of the bottle in wealth wish

Editorial | 13 Jun 2017

That the latest Gini coefficient, which measures wealth disparities, reading is at a historic high is alarming.

The Census and Statistics Department reading came in at 0.539, and that figure means the inequality in terms of household incomes is considerable.

It's little wonder then that the government's public relations machinery immediately went into a higher gear.

The talking point: to emphasize that the scientific figure isn't, strangely enough, scientific at all.

For some reason, the figure is said to be unreflective of the actual situation so much so that, if all subsidies were considered, the meaningful number would be much lower - at 0.473.

That figure is important for the government since 0.473 means the society is only "fairly" rather than "considerably" unequal. That's a huge difference!

But that's an artifice public administrators pull out of their bag of tricks not only here but elsewhere whenever they have a story that requires a lot of spin to put the gloss on a political narrative that sheds them and their masters in a bad light.

The cardinal PR rule here is to make an evil or a devil seem less malignant. In this case, 0.473, by world standards, is still quite high, but it is certainly better than 0.539.

With that new narrative, it is up to the audience to get the message.

However, immediately after the Gini reading was released, University of Hong Kong social work associate professor Law Chi-kwong warned that the gulf can only get worse because of an aging population and unless the next administration tackles the problem.

Law's remarks will alarm the business sector as much as the Gini reading will worry the social welfare sector. For he is no longer just an ordinary critic but someone tipped to be the next secretary of labor and welfare on July 1.

Executive Council member and lawmaker Jeffrey Lam Kin-fung, a businessman, can then be forgiven for not hiding his anger when Law said that Hong Kong may need to change its tax system by either introducing a capital gains tax or scrapping the 15-percent standard rate so that earners in the upper bands will pay 17 percent.

Would Lam have reacted so strongly had Law been just one of those academics making comments day in, day out?

The issue is why Law, a founder of the Democratic Party, has chosen to fire the broadside before rather than after he assumes office on July 1. Was it merely a slip of tongue by a Democrat still in opposition mode and yet to switch to the establishment role?

Or could it be a trial balloon to see how the public reacts to a controversial idea?

While both may be probable, there is a third possibility: that Law was offering up a greater evil to get the community to opt for a lesser evil. This isn't uncommon in politics, and should that be the case, Law probably isn't going for capital gains but for the standard tax rate.

While such a move may not reflect Law's personal view, it is likely that a tax reform of some kind could be in the pipeline when the next administration comes in.

No matter what the case may be, Law should learn to speak like a PR- savvy civil servant.

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