IT is budget time in all the former colonies of the Empire where thankfully, the sun has set. Only in India there are 'interim' budgets because no one expects the same group of leaders to be in office after the election results come in May. But in Hong Kong, where current leadership will also be there at the beginning of July, it ain 'interim. John Tsang, Hong Kong's Financial Secretary, ma d e his budget proposals public during his annual speech before the legislature at the end of February with the opposition parties obviously expressing their dissatisfaction, especially in an area that Tsang simply did not even address: the influx of mainland tourists that is growing in seemingly geometric proportions, creating a serious strain upon current resources. Tsang not only did not propose remedies to this problem – he just did not even bring it up! I was wrong about Tsang. When I came on the scene, I predicted innovative ideas to emanate from that man. What a let down – his only true consistencies have been in lame budget ideas, underestimation of budget surpluses and failure to truly look at Hong Kong's problems, now.

Opposition political parties have started to have a field day in criticism, having proposed a $HK100 levy for arriving visitors (People's Power suggested this one) or (as per the Democratic Party) a varying levy from $HK20 - $HK50. The concept of assessing a levy upon visitors is neither a new one nor one solely applicable for Hong Kong. International air passengers and ferry passengers coming to Hong Kong already pay fees as part of their ticket prices to offset infrastructure costs. A recent government study predicted that three years from now, 70 million visitors will annually visit Hong Kong, up from 40.55 million, now (as per the 13 February China Daily). There is a problem here with this number: China Daily states 40.55 million. The Hong Kong government claims 50 million. The Hong Kong Tourism Board claims 58 million. The China Daily states that 8 percent more visitors came this year than last. The Hong Kong Tourism Board (12 February South China Morning Post) claims 16.5 percent.My guess? No one knows for sure - why bother counting when both the PRC and Hong Kong governments welcome visitors - the more, the merrier! Only infrastructure costs to cover the necessities associated with so many more visitors is not being mentioned at all in any government plans or announcements. Will more border crossings be opened up? Will more subway lines be built? What about toilet facilities in the areas that visitors visit? And what about police and medical facilities? These seem to me to be things that have to be planned for - especially since everyone seems agreed upon 100 million visitors a year (overwhelmingly from the PRC) in the not too distant future. If tax revenues are to cover these needs, then what will be sacrificed in order to use taxes to cover the costs of more visitors coming to Hong Kong?

In 2003, the government actually attempted to introduce a bill to levy a Boundary Facilities Improvement Tax from all overland travellers to offset deficits at that time. Politics - from both sides of the border - seemed to stifle this idea. Subsequently, the PRC's Individual Visit Scheme allowing truly mass movement to Hong Kong from China virtually changed the economic climate in Hong Kong. And now an arrivals tax is back in discussion. According to Yiu Si-wing, legislative councillor of the tourism industry (as per the 11 February front page of China Daily, Hong Kong edition - there were three page 1 'editorials' in China Daily, 11, 12, 13 February voicing opposition to the idea of an arrivals tax) 20 percent of Hong Kong's work force depends upon tourists and the arrivals tax idea is not liked at all by the tourism industry. Yiu's alternative - unbelievably ludicrous - was to build more shopping malls at the border instead of taxing visitors a nominal amount. Unbelievable - build more malls!! Starry Lee, legislator and member of the Democratic Alliance for the Betterment and Progress of Hong Kong (a pro-Beijing political party that has done well at the polls because they understand what needs to be done to win an election while the opposition, thus far has demonstrated that they really haven't got a clue about what winning an election requires) stated that this proposed tax may upset mainlanders and could prompt mainland authorities to levy a similar tax on visitors coming to Shenzhen. Actually, a new form of tax for Shenzhen really isn't such a bad idea as that municipality is rapidly running out of land to lease and will need alternative forms of revenue, soon!

In the long run, Hong Kong must find the finances to alleviate far too widespread poverty as well as upgrade infrastructure based upon increased tourism. Frankly, there is widespread resentment by much of Hong Kong about the fact that so much revenue is being derived from visitors but that so few are benefiting from the revenue. The work force attributable to tourism is low waged and they are the ones whose needs should be addressed in the budget. Will Hong Kong lose tourists who would go elsewhere? Hell no! Not by train because rail facilities do not truly take mainlanders elsewhere - except for Macau, to a limited extent. Yet Macau cannot provide what Hong Kong has to offer and the masses coming to Hong Kong will not be flying elsewhere because air travel is out of the average tourist budget. Even with a moderate tax assessment upon arrivals, Hong Kong will remain the ONLY cost affordable place for the masses to visit.

The Taxation Institute of Hong Kong has taken a stance in opposition to the government - they support a tourist arrival tax because it is the only proposal made thus far which actually expands the city's tax base and would specifically target cost recovery of services and infrastructure costs used by visitors. Joseph Yau Yin-kwan, current Taxation Institute president, as per the China Daily (13 February) stated that "It is pointless to define it as a form of punishment; that there are precedents to collect levies from visitors, elsewhere." The same day, though, Hong Kong's Chief Executive, Leung Chun-ying ruled out the proposal to collect levies from arriving overland tourists, stating that Hong Kong people should not act arrogantly while the city was benefiting from mainland tourists. "...we must bear in mind that this is a bilateral relationship and the arrivals of mainland residents in Hong Kong are beneficial to Hong Kong's economy".

The question raised, though, is who are the real beneficiaries to the economy when local retailers and food services are forced to move out, when the subways are over-crowded and toilet facilities become both more scarce and difficult to maintain. Hong Kong MTR, the subway owners, takes pride in having clean toilets. Clean, in relation to public toilets in China - yes! Clean in comparison to any public toilet in Japan - don't be ridiculous! Japan sets the 'platinum standard' here and no place else in the world comes close! Regardless, no one can deny that so many more people in the densely populated, crowded areas of Hong Kong are impacting upon the lives and quality of life of local residents who do not share the benefits reaped from 40.5 million visitors last year, or 50 million....or 58 million - no one knows! The China Daily news and the news from South China Morning Post can really be 'different', at times. The 17 February SCMP (blocked from viewing on its website, that morning, in Guangzhou - that's what VPNs are for!) reported that police had to intervene, the day before, on fashionable Canton Road, where a protest demonstration against the massive influx of mainland visitors, called 'locusts' by Hong Kongers, took place. That the mainland tourists were puzzled by all of this was understandable, as the downsides to massive mainland tourism have simply not been reported by either China Daily or the People's Daily, not giving mainlanders an inkling that there is trouble brewing. Television news is not informative either - CCTV does not cover this and when the news of the Hong Kong stations plays in China, these subjects are blocked by government sensors. It is not just the mainland tourists who have been puzzled by all of this - it is the higher echelons of PRC government, as well, who are sheltered from the overall impact of substantial increases in visitors to Hong Kong who stay longer and spend more, creating substantial profits for those who own the facilities, without much benefit to the service industry employees being paid fast food franchise wages but in essence, no other benefits. Alas, no one seems to have studied - or seemingly wants to study what the additional costs are going to be with so many more visitors...and as far as those costs are concerned, who is going to pay for it?

Nearly 30 years ago, those few trains per day between Hong Kong and Guangzhou required tickets purchased way in advance and these tickets were subject to cancellation. Now, fifteen years ago, after purchasing our Guangzhou residence, I happily have a choice of either twelve trains a day between Hong Kong and Guangzhou, with ticket availability on day of travel - or taking a local train to Shenzhen and then crossing the border in Shenzhen. True, with the influx of visitors coming from Guangzhou to Hong Kong I have to get my tickets a week in advance and I do not always get the train I want. For many of my fellow through train passengers, this is the first trip out of the mainland - and perhaps the only trip of this sort they will ever make. They are prepared to pay a lot for this trip of a lifetime. There is no doubt in my mind (after all, I do travel with them to Hong Kong a couple of times a month) that these tourists can afford a nominal tax which they are not even likely to resent. Will this issue eventually be addressed ? Certainly not by the current administration!