Fiscal deficit needed to run social programmes

cc photo by flickr user Japanexperterna.se

cc photo by flickr user Japanexperterna.se

We are an unfathomable place. The government reaps tens of billions of surplus every year whilst at the same time so many of us are struggling on streets and at crumbling homes to make ends meet.

This is not news. We know about inequality; all too well and all too painful. During election days social issues dominate debates as though every candidate is God-sent to resurrect the poor and needy. Government has a commission on poverty. Operating charities is relatively easy and straightforward. Yet working hours keep hiking, only for people to go back home with less purchasing power in pocket, destitute and despair. No way out. No outlet.

Something’s wrong.

It begins with fiscal policy. A fundamental revolution is as badly needed as ever to budget our public finances. The thought of achieving a certain surplus each year must be abandoned. It’s high time now to run a moderate deficit to prevent further tearing-up of our social fabric and cohesion – a deficit to fund social programmes.

Our social programmes are severely mean and lack a holistic security network. In absolutely every aspect, already covered or to be provided, additional fund, much fund, needs be injected. Means-testing on social allowance provision, whether on the ground of low income, inadequate asset or retirement, ought to be abolished. Housing provident fund for each and every individual must be set up to mandate workplaces’ as well as the government’s contribution. Retirement plan must be made universal: the less you possess at the age of 65 the more you will be provided by public coffer, in cash and kind. Unemployment benefit as a right must be offered. Exploitation in “free market” must be signalled out from off the radar and offending company directors must be prosecuted. University enrolment must be exponentially expanded so that our next generation will grow up seeing it a part of their life journey and a God-given right, rather than a privilege. The list goes on and on, until everything we the people need to live in dignity is covered.

Running a moderate deficit goes beyond the immediate need for reducing stark inequality. In the medium-run, not so long into the future, a deficit will be vital and essential to maintain our continued growth as 2047 nears. A deficit, especially that is intended to fund social programmes, injects enormous confidence into our economy. When our technology, financial service as well as trade and logistics advantage ebb away and when our politics becomes vaguer and repressive still, it will be our willingness and readiness to invest in average individuals that instil and maintain confidence in the marketplace.

A moderate deficit alone will likely fall short of meeting funding requirement for social programmes. Taxing more and revolutionising tax structures are not only inevitable but are the right things to do. They all need to pay more – the wealthy, the powerful, the vested interests, the octagons in Executive Council and Functional Constituency, the top certain percentage, etc. Likewise, corporations in excess of an acceptable scale, measured in profit, employee number, stock price, etc, will have no place to hide. Current tax structure of charging so few categories so heavily must be no more. Unrelenting expansion of taxable income and concentration on incrementals of the top earners must be our new policy focus. No social programme will thus be left out unfunded under this sky net.

That leaves mentality and the very essence on how we have been organising our economic activities and social structures, which bizarrely resulted in a civilised society and brutal labour relations, ossified work environments and indifferent interpersonal relationships existing in parallel. Blame the ignorance on and legitimisation of exploitation in the name of laissez-faire. The repercussions are everywhere around us today. There is no justice and morality when so few have so much and so many have so little.

Democratic socialism in our way out. It best combines individual freedom with social justice. A representative government popularly mandated through ballot box that is willing and able to intervene forcefully is not a utopia but a reality that we must all strive for. Think big; not small. Fiscal deficit is the starting point but there will be more, likely followed by the breaking up of monopolistic property developers, banks and insurance companies and the abolishment of illegal land hoarding demons like the Heung Yee Kuk.

With enough political will and determination to sacrifice there will be nothing that we cannot accomplish. There will be no more enriching the rich and impoverishing the poor. The promise of equality for all shall return once more to our ancient and great homeland.

hongyu@wang.com'

Hongyu Wang

Hongyu Wang is a Hong Kong-based real estate trader and author of Grameen in Kosovo: a post-war humanitarian manoeuvre. His articles have appeared in Sunday Examiner, A-Desiflava Magazine and Harbour Times and online on In Media, The News Lens, Jumpstart Magazine, EJ Insight, The Glocal and China Current.

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