A winning hand
James Tien
3 December 2004 South China Morning Post
Each year, the government seeks out the opinion of the people as it prepares the chief executive's policy address. The Liberal Party is naturally part of the process. While talking to my constituents and other Hong Kong people, I have found that their views reinforce those that my party has long held. They want a sustainable economy. And that has been the basis of my party's proposals to the government. Yet one, in particular, has garnered considerable attention.
At a recent meeting with Chief Executive Tung Chee-hwa, the Liberal Party raised the idea of building an entertainment centre in Hong Kong that would include casinos, which would cater exclusively to tourists.
While the idea is not new, there is fresh evidence that casinos would prove beneficial to Hong Kong. Anecdotally, friends from Macau say that since the city liberalised its gaming industry, restaurants are often full and taxis increasingly more difficult to find. More concretely, the tourist boom it has sparked has allowed the Macau government to cut many taxes, while increasing welfare benefits and giving civil servants a pay rise.
Compare this with Hong Kong's tight fiscal and economic situation. We face a huge budget deficit. The government has been forced to explore the possibility of raising revenue in ways long considered unconventional for Hong Kong, for example, a goods and services tax (GST) and a tax on capital gains. These would hit us hard. For one thing, consumption is a key part of our economy, which a GST would hurt. On the other hand, casinos could directly provide $10 billion or more in new government revenue each year, easing the deficit. The choice is simple when you consider that new taxes are controversial, while the creation of a new industry adds strengths to the economy.
Indeed, a brand-new industry would see many new jobs created - in particular, work for those who need the most help; those who have not had the opportunity of higher education. Meanwhile, food and drink outlets, and the hotel and transport industries, would benefit from even more tourists coming here, further easing our unemployment rate.
Still, some say our proposal will hurt Macau. But in truth, it will take five to 10 years to establish casinos here, a period of time that would see Macau's already booming casino industry become even bigger. The relaxation of limits on mainland visitors to Hong Kong and Macau over the past two years has seen many more new customers at Macau's gaming tables. Today, nearly 90 per cent of its casino guests come from the mainland. As wealth expands further, even more mainlanders can be expected to seek out casinos.
As such, the cake is getting bigger, and will be more than large enough to comfortably accommodate Macau and Hong Kong. Thus, Mr Tung should raise the issue again with Beijing and explain our case. Of course, some are concerned that increased gambling opportunities will carry a social cost. But that is precisely why we propose that the casinos be set up on Lantau, far from the city centre. More importantly, they would cater exclusively to tourists.
Finally, if you think about it, casinos are a natural extension of Hong Kong's role as the region's pre-eminent entertainment centre. Our shopping outlets are without rival. And soon, a Disney theme park will provide further family entertainment. Casinos round out our offerings.
Gambling capitals around the world now understand the need to cater to all segments of the tourist trade. Las Vegas has been steadily building more family entertainment and shopping opportunities. As a city already rich in these traditional attractions, it is right that we expand in the opposite direction to embrace casinos. And we would not be alone: Singapore, a city much like ours, has invited potential casino operators to submit proposals.