Heed your own words on debating a GST, Mr Tang (30 August 2006)

I welcome the financial secretary's prompt response ("Let's get on with the real GST debate", August 25) to my column last week on the subject of the goods and services tax ("Bury the GST proposal, now", August 24). In particular, I welcome his appeal for debate free of "fallacy and fear-mongering". I hope it is an appeal that Henry Tang Ying-yen and his own officials will take to heart.

I must, however, refute his suggestions that those of us who oppose the introduction of the tax are burying our heads in the sand or that the 6,000 people who marched in Central earlier this month were driven by emotions and a miserly reluctance to pay more tax. The marchers were intelligent businessmen and professionals. They know exactly what the government is proposing and they simply don't agree with it.

My suggestion was that we use the investment return on the Exchange Fund, not the fund itself, as a way to avoid the need for a GST. Since 1997, the average rate of return on the Exchange Fund has been 6.6 per cent, or more than HK$60 billion a year.

I agree with the financial secretary when he says there is no room for fear-mongering in the business of organising Hong Kong's finances. We need accurate and credible projections. But in the nine budgets since 1997, the government has consistently overestimated its deficits and underestimated its surpluses. These deviations have ranged from HK$1.3 billion to HK$11.6 billion.

For the past financial year, the government in March announced a revised surplus estimate of HK$4.1 billion. The actual surplus for 2005/2006 turned out to be HK$14 billion.

I agree, too, with the financial secretary that we need "a calm and rational debate". That is why it is simply not good enough for the government to dismiss the concerns of the majority of the Hong Kong people asked to take part in a public consultation on a GST as emotional and ignorant simply because they do not match the government's agenda.