Saturday 12th March 2011

Dear Reader,

Two new pieces, one from a guest contributor, on the recent calls for a universal pension in HK:

NEW ARTICLES
Universal pensions in HK: the case against
In a guest contribution, economist Jim Walker lays out the case against calls for a universal pension in HK, including the lessons from history of the European welfare state. (12-Mar-2011)

The cost of a universal pension
Following Jim Walker's guest article today, we run the numbers to show why a universal pension would put HK on the road to fiscal hell, a high-tax European-style welfare state. The ageing population means a HK$6k per month pension in 2039 would imply at least a 35% tax rate, and probably higher as mobile profits and professionals leave. Even 13 years from now, tax rates would rise to at least 28.5% to balance the budget. (12-Mar-2011)

RECENTLY ON WEBB-SITE
Party finances in HK
Which is the wealthiest political party in HK? The answer may surprise you. We publish the accounts of the four main parties for their last two financial years, which go some way towards explaining the hand-to-mouth existence of several of the parties, and the lack of any coherent policy platforms in the pro-democracy camp. This is largely a result of the electoral voting system which divides and conquers them, countered by the secretive funding of the biggest-spending party. (7-Mar-2011)

Now withdraw the SSD proposal
Latest disclosures show that the increase in short-term resales from 2009 to 2010 was only 1.9% of transactions, and fewer than 1 in 5 are in that category. Having abandoned one unpopular budget measure this week already, the Government should now do the right thing and abandon the Special Stamp Duty proposal. It is illegitimate, unconstitutional, creates too many unintended victims and runs the risk of chaos upon a successful judicial review. (2-Mar-2011)

Reforming Salaries Tax
The budget was devoid of any structural reform to public finances. In our first article in a series, Webb-site fills the void with a proposal to reform Salaries Tax to make it a simpler, fairer and flat tax. (24-Feb-2011)

IN OTHER NEWS
Webb on "Backchat" re Home Ownership Scheme and the housing market
RTHK, 9-Mar-2011

Hong Kong Finance's Finest Host Their Own Razzies
Wall Street Journal, 4-Mar-2011

Pass it on!
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