Tuesday, November 01, 2005

This is Why Hong Kong is Going Down

The Government announced on October 31 a proposal to extend the concessionary duty rate on ultra low sulphur diesel (ULSD) for another year. The extension of the $1.11 per litre duty concession will cost the Government about $1.1 billion in 2006.

The lower duty is supposed to soften the blow of high oil prices on the transport industry. And this is not for the first time that the government has done this. On six other occasions - December 2000, June 2001, March 2002, March 2003, March 2004 and December 2004 - the Government, with the Legislative Council's agreement, extended the concession, as a measure to give "temporary" relief to the transport industry.

The question that needs to be answered is this: Higher oil prices affect just about every sector of the economy. Why is transport the only sector singled out to get the concessionary rate? Why are middle-class car drivers left out?

When a government rigs the rule of the game to give handouts to some group (the transport sector in this case) but not to others, inevitably the rule of law is damaged. Without the rule of law, what is left to build prosperity?

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