Hong Kong: Tycoons hit the jackpot

End low pay

Hong Kong’s press is busy speculating over the identity of an anonymous tax-payer who coughed up a record HK$101 million (US$12.6 million) in taxes, last year. Under Hong Kong’s tycoon-friendly tax regime, the identity of the mystery man need not be made public. To pay so much in one year this record-breaker must have earned a staggering HK$631.25 million, or HK$1.73 million per day!

The news created a stir because last year’s highest single tax bill was a paltry HK$18 million. This doesn’t mean the city tax authorities are suddenly squeezing its billionaire elite harder. It reflects instead the surge in business profits on the backs of a booming economy that grew 7.3 percent in 2005.

Of the 33 companies on the Hang Seng stock market index, 27 reported higher profits for the last financial year and 19 reported their best ever profits. But while the tycoons are seemingly knee-deep in money, Hong Kong’s unelected government has made clear it intends to cut budget expenditure further to maintain the Special Administrative Region’s low tax regime.

Tycoons fear democratic rights

Hong Kong’s tycoons are terrified of demands for a fair deal for working people. This is why they bitterly oppose any steps towards greater democracy. They want to keep today’s system, which gives them record profits, while real wages have fallen, and education and other public services face huge cuts. A recent government report openly stated, "If universal suffrage was implemented or functional constituencies abolished hastily, Hong Kong might become a welfare state". By ’welfare state’, the unelected bureaucrats who produced the report mean higher spending on schools, hospitals, pensions and the environment. This explicit statement confirms what socialists have said all along – that rather than promoting greater democracy, the capitalists and their system feel threatened by such demands. The government of Chief Executive, Donald Tsang, – under the neo-liberal slogan ’Big Market, Small Government’ – aims to bring public expenditure down to below one-fifth of gross domestic product, one of the lowest rates anywhere. This is the economic equivalent of ’anorexia’ for the public sector, leading to more job losses, longer hours and higher charges for the services we rely on. Already almost 40,000 jobs have been cut from the public sector since the year 2000.

Workers prepared to struggle

Recent months saw thousands of migrant workers demanding improved pay and conditions and joining the demonstrations during the WTO summit in December, as well as big protests by teachers against cuts in education. These developments underline the position of the Committee for a Workers’ International (CWI) members: Working people need their own political voice – a new workers’ party – in the struggle against the administration’s anti-working class policies. There is no shortage of money for raising wages and improving schools or health care. Hong Kong’s millionaires have seen their combined wealth rise more than 30 per cent in one year, to US$437 billion. The big corporations, including more than 3,700 foreign corporations, pay the lowest taxes in the world – corporate tax is just 17.5 percent, compared to an average of 29.8% in the OECD (the world’s major economies). Offshore funds – i.e. speculators – operating in Hong Kong are exempt from profit tax altogether!

End the millionaires’ dictatorship

Capitalist tycoons, like Stanley Ho – who denounced last December’s huge pro-democracy march – have grown fat on Hong Kong’s low tax regime. Ho, who sits on a personal fortune of HK$52 billion, already has a vote; he sits on the Selection Committee that gets to pick Hong Kong’s government! During the crisis in 1997, wage earners were told to tighten their belts with a wage freeze to bail out the speculators and casino capitalists who caused the crisis in the first place. Now the economy is booming, and the big corporations are making record profits. But workers have not been repaid for their sacrifices. Nearly two-fifths of the workforce – 930 000 people – earn less than HK$9,000 a month, while 200,000 earn less than $5,000 a month. This is why trade unions should launch a concerted campaign for a minimum wage – "a floor" – of at least HK$9,000 a month for full-time employees. The struggle for democratic rights, as the government has now admitted, is linked to the struggle for our share of Hong Kong’s enormous wealth. This requires the formation of a new, mass working class party, committed to abolishing the dictatorship of the millionaires and carrying out democratic socialist policies.

This article was first published on 6 April by chinaworker.org

Liked this article? We need your support to improve our work. Please become a Patron! and support our work
Become a patron at Patreon!

Be the first to comment

Leave a Reply

Your email address will not be published.