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UPDATED: November 15, 2010 NO. 46 NOVEMBER 18, 2010
Should the Rich Be Given Housing Subsidies?


On October 12, the Department of Human Resources and Social Security of Shenzhen, a boomtown in south China's Guangdong Province, released a list of recipients of housing subsidies for top professionals. The list entitled Ma Huateng (Pony Ma), CEO of Tencent Computer System Co. Ltd., to receive 3,100 yuan ($456) each month since July.

Ma ranks second on the latest 2010 Hurun IT Rich List, and his total assets amount to as much as 29.3 billion yuan ($4.3 billion).

Opponents say subsidies should be for those who need them to improve living conditions.

In reply, the Shenzhen Government said Ma was identified as a "leading talent" through stipulated procedure in June 2009. Based on an incentive policy for high-performance professionals in the city, Ma is entitled to official housing subsidies for five years. This is an incentive and has nothing to do with any other social welfare policies.

In 2008, Shenzhen formulated policies for attracting top professionals, providing incentives for people who met standards, including subsidies for housing rentals or purchases.

Tencent said Ma always donates any money he is awarded to charity and the housing subsidies offered by the Shenzhen Government would be handled similarly.

Twisted stimulation

Xu Lifan (Beijing Times): Generally speaking, senior business executives have much higher incomes than average. Besides, they enjoy preferential treatment in many fields, since the government wants to attract greater numbers of them. This means an imbalance in public resource distribution. Although this kind of imbalance derives from good intentions for the long-term development of a region, it still brings about a strong sense of inequality among ordinary people. For Ma Huateng, the housing subsidies will not change his quality of life. Their greatest significance is making him feel like a talent that's cherished by the government.

Obviously, the original good intention of the subsidies doesn't accord with the changing social climate. That's why people question it.

In the market system a talented person's value is determined not by the government, but by the market. Therefore, a government valuation shouldn't play a role, and may even have the opposite effect.

Society has developed into the phase of public financing, and government should be cautious when using taxpayers' money. Taking Ma for an example, it is an apparent violation of the original intention of public finance to subsidize him, as he already has a large fortune.

Housing subsidies for senior business executives are being provided because the government hasn't understood the essence of the market economy. In order to attract more high-caliber professionals, instead of getting involved in putting a price on them, the government should be doing more fundamental work, including creating a suitable environment for career development, and building a fairer financing and taxation system. Valuation by the government is not the best policy to attract talented people. In this way, not only will the government become over-extended, but also magnates such as Ma won't feel at ease when receiving the money.

Cao Lin (Huashang Morning Post): One of the reasons for giving housing subsidies to the rich in Shenzhen is repaying them for their contributions to the city's development. At first glance, it seems to make sense. But it actually doesn't.

Admittedly, these high-performace professionals do make contributions to Shenzhen's development by paying taxes, creating many job opportunities and undertaking social responsibilities. Nonetheless, the contributions they've made are not public welfare-oriented. While creating benefit for society, they have gained much profit, as well. Taking Ma Huateng as an example, isn't 29.3 billion yuan worth of property a great repayment from society and the market for his hard work? The government has no need to be grateful and to use taxpayers' money to subsidize those who don't lack it. What's more, should the government get consensus from tax payers before taking their money to subsidize heads of enterprises?

The government's reward to Ma derives from deep-rooted utilitarian logic: The more contribution one makes, the more reward from government one should get. But this is the logic of businesses—and the government is not one of those, but an organization offering public services. A subsidy from the government should be based on who needs it most rather than who has made the most contributions. Public finance should be spent on those who need it most. It should be for necessity rather than for luxury.

Zhang Guifeng (Xi'an Evening News): Housing subsidies for Ma Huateng or other top professionals in Shenzhen are redundant. For them, the greater the reward, the better. But it's damaging the quality of public assistance from the government.

With the current high housing prices, in order to attract more talented people, it's reasonable to improve the local environment by offering material incentives. There is a problem though. Who is more eligible to claim government assistance: successful and wealthy business people like Ma or start-up entrepreneurs? The answer speaks for itself.

Therefore, housing subsidies should be awarded to people who are just start-up operators rather than those who are already successful and wealthy. Only in this way can an environment good for business development and able to attract more talented people be created.

Lian Hongyang (Guangzhou Daily): The side effect of unbalanced development, which is usually called "the Matthew effect," is one of the biggest concerns in society. A public policy should never allow high-income earners to become wealthier and wealthier, while low-income earners become poorer. While most people are in too tight a squeeze to buy a house, billionaires can still receive housing subsidies from the government. Public money belongs to taxpayers. The result is neither fair nor righteous, and this is hardly acceptable to the majority. As an incentive policy, official housing subsidies for magnates like Ma Huateng are invalid. Stimulation in the right way can have positive effects. Otherwise, it is totally in vain, and even has a negative impact.

For a long time, public policies have put efficiency before equality. Giving preferential policies and subsidies to high-income, top-ranking professionals derives from this kind of principle. It wouldn't have caused so many disputes in the past, but in a developing society where equality comes first, it will inevitably find opposition.

No grounds for blame

Deng Haijian (Securities Times): The housing subsidy policy in Shenzhen was originally intended to reward high-performace professionals who have made great contributions to the city's development. Even if very few of them are able to afford houses easily, they just hijack the policy. Still, we can't deny the good intention or rationality of the policy.

Maybe the professionals don't lack money, but they need the recognition of the local government.

It's not wrong for the public to be vigilant about public power. Nonetheless, three aspects warrant attention.

First, have high-performace professionals made adequate contributions to the city? Are they eligible to claim a subsidy on account of their position and performance?

Second, when the government focuses on the housing issue of high-performance professionals, has it paid equal attention to housing demands of people at the bottom of society? Do they have equal rights to the professionals in sharing public finance?

Third, is the money spent with the desired effect of stimulation?

At no time should the practice of rewarding the good and punishing the bad be overshadowed by consideration of egalitarianism. It's no one's business how much property Ma possesses, as long as it is legal. We have to admit Shenzhen's fast development is due largely to its effective methods in attracting and rewarding talented people. These methods should be thought about and used as a reference by other cities. The housing subsidy policy is a reflection of Shenzhen's specific views about talent.

Wuyue Sanren (www.eastday.com): Shenzhen's policy to attract high-performance professionals says people who meet the standard can enjoy corresponding preferential treatment, including housing subsidies.

We can see this policy is not specifically designed for senior business executives but sets a standard. As long as people have met the standard, they are entitled to enjoy the treatment at their ease. High-performance professionals are not all entrepreneurs. They may be scholars in specific areas, experts or engineers.

When instituting policy, the government doesn't go into detail for every specific case. the Shenzhen Government has, in this case, worked out a policy with a bottom line. As long as people pass the line, no matter how much property they possess, they should enjoy the entitlement without question. If some people are deemed not entitled to it, what about others who meet the requirements? Should they not have it either? What's more, entrepreneurs haven't done anything wrong. Since the government has already set out the policy, entrepreneurs should get the money they deserve.

Nowadays, because of insufficient input in public services and improving livelihoods of people on the bottom rungs of society, people become suspicious whenever they hear the government is spending money. Although some entrepreneurs have donated considerable amounts of money to charity, people still have a strong sense they haven't fulfilled due obligations.

Wen Yan (Shenzhen Special Zone Daily): Shenzhen's housing subsidy policy was put into practice to attract high-performance professionals to live and work there, which has nothing to do with other areas of social welfare. Therefore, it's not fair to question people's qualifications to entitlement of this policy by judging how much property they possess.

High-performance professionals who are badly needed for the development of the city should be actively recruited. The government should do everything it can, no matter how much it costs, to attract them. Recently, high housing prices have become a major restriction on Shenzhen attracting talented people. The city has made great efforts to solve this problem, hoping to eliminate worries with an innovative policy. Cities such as Shanghai and Xiamen and Fuzhou in Fujian Province all have similar policies. In circumstances of severe competition for talented people, Shenzhen of course should take action, and take effective action.

Ma Huateng himself may have both talent as well as wealth and doesn't need this subsidy. But for most of the 684 people on the list, this housing subsidy is necessary, and is one of the reasons they chose Shenzhen.

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