Over a long and chequered career in politics, Regina Ip Lau Suk-yee has suffered many barbs and brickbats.
Last week, however, marked a strange first for the 68-year-old former security tsar who is now one of the city’s most popular lawmakers as well as a member of the Executive Council, the chief executive’s de facto cabinet.
That’s the label Liberal Party leader Felix Chung Kwok-pan pinned on Ip’s altogether sensible proposal to stop the government-created corporate ogre known as Link REIT from ripping off wet market stalls, shop owners and tenants at public housing estates.
The Link—a real estate investment trust founded in 2004, when the government hived off a huge chunk of assets from the Housing Authority that included scores of wet markets and 151 nondescript, low-brow shopping malls mostly located in public housing estates—has since become a symbol of how corporate avarice routinely trumps social responsibility in a city that cossets the rich and pays scant attention to the poor.
Since the privatisation of these assets in 2005, the Link has made a practice of sprucing up dreary-looking markets and malls while raising rents well above the city average.
According to a study by Ip’s New People’s Party, retail rentals across the city have risen 72.8 per cent since the Link takeover; at the same time, rents at Link-controlled shops and markets shot up 132 per cent.
That steep rise has pushed a number of humble retailers out of Link properties. Those who remained have had no choice but to pass on the cost of precipitous rent hikes to consumers (predominantly public housing residents) in the form of higher prices.
Meanwhile, the Link has diversified and enhanced its property portfolio through land purchases and by acquiring additional malls in Hong Kong from private developers, as well as commercial properties on the mainland.
In December, the Link, now the largest real estate trust in Asia, sold 12 shopping centres to a consortium led by Gaw Capital Partners for HK$12 billion (US$1.53 billion), reporting a net gain of HK$2.78 billion (US$354.2 million).
That was the second major sell-off by the trust following its HK$23 billion (US$2.93 billion) sale of 17 malls to a consortium of Gaw and Goldman Sachs in the previous year.
Thus, the Link’s stock is soaring, but the trust shows no signs of offering any relief to retailers—and, by extension, residents—in the public housing estates who are paying for its corporate success.
It’s a case of the poor subsidising the rich and yet another textbook Hong Kong example of private profit and greed sweeping away any notion of fairness and social responsibility in what a famously conservative American think tank, the Heritage Foundation, has dubbed the “world’s freest economy” for each of the past 25 years.
When such stark economic inequalities occur, a government that serves the people is supposed to step in and make things right—especially when that government created the very monster that is now rampaging beyond its control.
Kudos to Ip for trying to rein in the Link with her proposal to cap rents for retailers operating in public housing estates according to a formula based on inflation, median monthly household income and property values.
That’s not communism; it’s justice; it’s government doing what government is supposed to do when private corporate interests undermine the public good.
Unfortunately, however, Hong’s Kong’s political system makes it virtually impossible for proposed legislation not initiated or approved by the executive branch of the government to be introduced to the Legislative Council, so Ip’s proposal appears dead on arrival.
But it nevertheless serves as a not-so-gentle reminder from a popular cabinet member to Chief Executive Carrie Lam Cheng Yuet-ngor of the “three mountains” she identified to lawmakers as the Hong Kong government’s biggest challenges three years ago when she was chief secretary: the Link’s profit-first, people-last management of public housing markets and malls, unwarranted MTR fare increases, and the absolutely bonkers offsetting mechanism of the Mandatory Provident Fund, that allows employers to raid their employees’ retirement savings to make payments for severance or long service.
As of today, 19 months into Lam’s leadership as chief executive, the MTR’s reputation lies in tatters due to the scandal over shoddy works and missing documentation during the construction of the Shatin to Central link, Hong Kong’s costliest rail project to date.
But the corporation’s controversial fare adjustment mechanism—which is rigged to produce only increases, never decreases—remains in place while the railway continues to rake in massive profits from its real estate holdings.
The Lam administration claims to have solved the crazy, never-should-have-happened conundrum of the off-setting mechanism by offering a government “subsidy”—read, “pay-off”—to employers to compensate them for what they had previously been stealing from their employees’ retirement funds when they laid off workers or paid them what they were owed for long service.
But employers complain that the subsidy is too small, and unionists roundly condemn a government that is too quick to compensate businesses for what they should rightfully have been paying their employees all along.
As for that Everest-sized mountain called the Link, Lam remains at its base staring upward, ignoring Ip’s outstretched hand as she seemingly presides over a government of the rich, by the rich, for the rich.