My Take | Invest in a bright future for all Hongkongers

What should we make of the government-proposed future fund? Well, it depends on whether you think we should invest for the future or save for the future. It makes all the difference. Say you opt for the latter, how much do you need to save? The task force mandated to examine this very question has just released its guesstimates. To counter an ageing population and a shrinking workforce, the fund's size will start at HK$220 billion, essentially money taken from the existing land fund from land sales. Then a quarter to a third of future fiscal surpluses will be injected continually into the future fund.

The fund and its investment profits will be locked up for 10 years. And even after that, the money can only be accessed in truly dire circumstances. What does it all mean?

It's the same wine in a new bottle. Currently, you cannot touch the land fund anyway except for infrastructure projects beloved of bureaucrats. In future, you can't touch the future fund at all! Without calling it as such, the proposed fund will have to run as a sovereign hedge fund if it is to achieve the returns needed to serve its purpose. Dream on.

The taskforce proposes putting the fund into the Monetary Authority's more aggressive long-term growth investment portfolio, which accounts for 3.6 per cent of the Exchange Fund. The portfolio, set up in 2008, has had a stellar run, producing an annualised return of 13.5 per cent, compared with just 2 per cent return from the rest of the Exchange Fund. But notice the date: 2008. The more aggressive portfolio investment has targeted private equities and property. But the worldwide real estate bubbles following the global financial crisis are likely to be one-off. Good luck for a repeat performance.

But investing in the future is a different proposition. Here is an interesting fact: Despite the cruel squeeze on our workers and middle class, our labour productivity has increased in the past two decades. Our people are resourceful and resilient. Enhance productivity and grow a bigger pie. Risk deficits now by giving our youth the education they deserve; exploit health care technologies and opportunities in catering to our sick and old, and turn our city into a livable and affordable place. Then we may have a fighting chance into the future.