On the up side any politician today would love to present a budget with a surplus.  Yet for 2012-13 Tsang is forecasting a deficit of HK$3.4 billion. He does have a history of forecasting deficits and turning in surplus. Last year he predicted a deficit of HK$8.5 billion and instead will end with a surplus of HK$67 billion or more. During his years in the role Tsang has under-estimated the year-end surplus by an average of HK$63 billion each year.

These surpluses accumulate and today Hong Kong has HK$662 billion in accumulated fiscal reserves (that’s equivalent to US$85 billion or AU$79 billion).  The US National Debt Clock shows that nation is US$1.5 trillion in debt - with an increase of US$4 billion each day. Per person that means every American owes US$49,211.65 - a staggering amount.

In Hong Kong the accumulated reserve equates to HK$93,635 per person - or US$12,074 (based on overall population of 7.07 million).  That’s a good start on the interest bill for the US deficit!

And if that $662 billion number sounds familiar - it’s the amount in US Dollars of the US Defense spending passed by Congress in December 2011.

Back to the budget!

With the strong base of earnings, Hong Kong will be able to lower taxes and provide some relief to families and small businesses.  This is a safe, no-nonsense budget proffered by a man likely to be in his last year in the role.

What’s lacking? Longer term commitments to tax relief, especially for small and medium enterprises. The conservative estimates mean the government is unwilling to spend extra. Then every year a small deficit turns into a large surplus.

In the face of growing economic uncertainty in Europe, Hong Kong has opted with a conservative budget - offering some relief but keeping the powder dry in case worse time are ahead.

Yet even with limited voter participation this election features old style electioneering and ribald politics. During recent Chinese New Year celebrations candidates made visits to temples and participated in community events. There’s even intrigue as two of the three candidates snubbed an invite by village association Heung Yee Kuk to an event this weekend. He is expected to endorse the one that showed up.

With all this politicking there’s one campaign tool missing - social media.

The USA presidential election in 2008 redefined the use of social media in politics. In today’s race for the Republican nomination candidates have unleashed an army of social media advisers to tap into established networks in communities across America. iContact released a study last week on how candidates use social media and how business can leverage the learning.

So how might the Hong Kong candidates learn? Let’s take Facebook. Below is the fan page for Mitt Romney with strong graphics, videos, information. And over 1.4 million fans.

Compare this to the Facebook page for CY Leung. He is the public favourite and has a strong web page. Yet on Facebook he has 489 fans. That’s not a typo. There are 489 people who “like” CY Leung on Facebook.

At first it makes you question the penetration of Facebook in Hong Kong. Yet according to Social Bakers there are 3.7 million registered users here - representing 53% of the total population. Local amusement centre Ocean park has 314,000 fans and is the most popular Facebook page for Hong Kong. That’s a huge lead over CY Leung.

There are cultural issues at play. Perhaps locals rely on Facebook for personal interactions versus brand advocacy. Or other platforms take the lead when looking at local politics. Or instead it may be an ‘arms distance’ between the public and politicians, as there is no direct election.

Whatever the reason the use of Facebook in Hong Kong politics has room for growth, especially if the USA is an example.

As part of the new morning routine, it’s custom to check daily pollution levels.  The Environmental Protection Department includes suburban and roadside pollution levels. Today it varies across town. Most places are ‘Medium’ while one or two are ‘High.’

Yet air quality remains a hot issue in Hong Kong. Yesterday the Executive Council endorsed new air quality targets for Hong Kong to reach by 2014. These require a dramatic decrease in many airborne pollutants. Still the to-be-allowed levels are, in many instances, above the recommended level set by the World Health Organization (WHO).

In Hong Kong air pollution leads to 3,200 premature deaths each year, according to University of Hong Kong. At this prestigious institution Professor Anthony Hedley studies air pollution and the impact on this city. He has devised the Hedley Environmental Index to measure the financial and human costs. As example, in December 2011 a total of 785,865 doctor visits are attributed to pollution.

And today the overall air pollution index in Hong Kong is ‘Dangerous’ according to WHO guidelines.

Developing a response to air pollution outstrips the ability of Hong Kong alone. Instead regional solutions must be developed including the cities of Guangzhou and Shenzen to the north. These mega-cities have similar problems. Together the three cities are working to create practical, long-term solutions. The challenge is enormous.

Hong Kong is an amazing city and a great place to live,. It does turn out, however, that you need to be able to breathe to survive here. And today that’s getting harder and harder.

Global news is focused on the video that purportedly shows US Marines urinating on the corpses of Taliban soldiers (for one summary article and a link to the video look here). The soldiers recognise a video is being taken. This clip was later uploaded to a video sharing sight - and from there spread globally.

This isn’t the first case of a damaging video going global. Few can forget UCLA Girl and her rant about Asian students in the library. Alexandra Wallace withdrew from the school, the Dean issued a blanket apology, and the former student received death threats.

Here in Hong Kong a pilot and stewardess from Cathay Pacific were fired when video footage appeared on-line of them sharing an intimate moment. Thankfully the airline determined the incident happened in an off-duty airplane - on the ground!

Clearly these incidents are all examples of violations of acceptable behaviour. The horrors of war, the stresses of study and the pressures of work all affected these individuals differently. What has turned these actions into global news stories is the presence of a SmartPhone. Instead of requiring a stand-alone video camera with uplink facilities, most people now point and shoot their phones. Whether in the field in the Middle East or in the cockpit in Hong Kong, mobile phone coverage means your next indiscretion is only an upload away.

While Hillary Clinton used the strongest language possible to decry these actions, I am sure she is thankful that in the 1990’s an intern in the White House didn’t have a Smart Phone in her purse.

Luckily when I snapped this photo I’d chosen the right retail outlet. Why?

Last week a Hong Kong couple tried to take photographs in front of the Dolce & Gabbana store in Harbour City mall on Canton Road in Tsim Sha Tsui. Details are sketchy, but a security guard and a sales person stopped them from photographing. It was stated that Mainland tourists can take photos but not Hong Kong locals. The man posted this on Facebook and his comments were flagged by local newspaper Apple Daily (circulation 280,000 - thanks Sunny!).

The next day, this tabloid newspaper sent a photographer - who was also sent away. Again it was explained that local Hong Kongers couldn’t take photographs, while Mainland tourists could. This was too good a story for Apple Daily to pass up. According to Wikipedia, this mix of fashion and controversy is tailor made:

“Apple Daily’s popularity as Hong Kong’s second best selling newspaper, according to AC Nielsen, is derived from its concentration on celebrity coverage, brash news style, sensationalist news reportage and its anti-government political positions.” (Source: Wikipedia)

From the coverage in Apple Daily, the issue escalated through social media. It appears the discrimination by a luxury retailer became a political issue, as some fear preferential treatment of Mainlanders means local rights are being overlooked. Others protest the power of large scale brands.

On Sunday a protest was held where over a thousand attended. Throngs blocked the entrance to the store. All carried cameras.

In response Dolce & Gabbana issued a statement denying their staff made the comments. No apology was offered. Yesterday, inflammatory remarks attributed to a D&G salesperson were widely circulated on-line. then reprinted in today’s mainstream newspapers. The South China Morning Post reprinted her accusations:

Woman claiming to be Dolce & Gabbana employee calls protesters ignorant

She used other terms - apparently labelling the protesters “mentally retarded” (see article above).

This is a classic example of a crisis that is spiralling out of control. In the absence of clarity from Dolce & Gabbana the on-line and mainstream media are making the news. In response the company needs to come out publicly and address these issues before the press. A large-scale media conference could prove unruly. But a series of in-person interviews offer a better opportunity to get the message across.

And first and foremost, this needs to start with an apology - whether it’s over the misunderstanding, the way the issues has escalated unreasonably, or the initial comments themselves. If not, D&G risks long-term brand damage.

What should have been a “one day wonder” is turning into another week of front page headlines.

UPDATE: Today ‘Campaign Asia’ ran a feature story on this issue, and quoted me. Read it here: http://tiny.cc/8szt7

I first lived in Hong Kong from 1996 to 1999. My colleague Noel Parrott at the time said, “Hong Kong will be a great city when they finish building it.” For those who’ve been here you know the building never stops. The General Post Office in Central was waterfront when I lived here. Today it’s separated from the harbour by a six lane highway.

More has changed than the waterfront. Hong Kong is one of the most cyber-connected cities in the world. Social media consultants WeAreSocial have a dynamite presentation on the facts and figures of connectivity in this island nation. More than 100% of the population have mobile phones (that means most people have two or more devices).

Yet it’s odd to see few businesses embracing the opportunities that well-connected Smart Phone users present, such as Geo-Tagging. What’s that? It means a site that allows us to share our physical location, through the use of Smart Phones and Global Positioning Systems (GPS). These services let you “show” your friends exactly where you are – and it creates a digital trail as to where you’ve been.

The leading App in this space is “Four Square” as well as “Facebook Places”. To start download the App then create an account – if you do, search for WallyBalloo (that’s me – an old childhood nickname). Then when you go to a place you “Check In”. It’s that simple!

Geo-locating Apps will be of interest to businesses as users can also sign in to receive push notifications. Checked into a Starbucks? You can get a discounted coffee. Near a gym? They may send you a special offer. Banks may offer reduced credit card fees. Restaurants may offer “2 for 1” specials.

At the moment this is a consumer-driven application. Other Apps using this are “Instagram” – a photo sharing App that geo-tags the location of the photo taken. If you use these services you might also download “Sonar” that amalgamates all the various geo-locating check-ins and tells you who is in the vicinity (there are 3 people now checked into Kinwick Centre).

For now, here are some Instagram initial impressions of Hong Kong…enjoy!

As part of the agenda, I was invited to present on the basics of media relations. From writing a press release to engaging in social media, there was a lot to cover in 45 minutes.

To ensure I covered all the right bases, I asked what was necessary for the presentation on the ‘Media Diplomat’ group on Linked In.  While many use Linked In for the networking connections, you can take the site to another level by accessing the numerous groups. These forums are as good as their members. Some have robust dialogues with active participants. Others are quite stale. It’s a good idea to explore the groups relevant to your industry - you can meet other professionals and continue learning.

The presentation covers the basic rules of engaging with journalists, to some core tools in media relations (writing a media release, hosting a press conference).  The end covers the basics of social media relations.

As always, the presentation is available to all on Slide Share - check out my page here for a copy of the slides.

ABC Television is home to the current affairs program “Four Corners” that aired a segment on inhumane treatment of Australian cattle at Indonesian abattoirs.  Not that a visit to a slaughterhouse is ever for the feint of heart, however this program shows particularly gruesome scenes. (View the 30 May 2011 episode on-line at ABC’s iView site.)

In the two weeks since the program aired, the national newspapers have been filled with stories on the issue. This has bubbled all the way to Parliament with a decision by government to ban live cattle export to Indonesia. This complete ban followed an interim step of black-listing the 12 abattoirs shown in the program. Backlash led to a full ban and calls for an end to live exports.

The export of live cattle is a multi-million dollar business in Australia. The purpose-built ship Becrux is such a formidable piece of machinery that “Mighty Ships” on The Discovery Channel profiled the carrier. (Oddly enough the episode is available on torrent file sharing sites but is no longer listed on the list of episodes for the series.) The ship can accommodate 1,400+ live cattle and travels regularly between Darwin in far North Australia to ports in South East Asia, including Indonesia. Live cattle is the export of choice for Indonesia as infrastructure is not in place to refrigerate meat.

The live cattle issue is now a topic of national conversation. Prime Minister Julia Gillard explained the ban on exports to Indonesia as temporary, allowing inspectors and exporters time to put in place monitoring to ensure humane treatment of cattle.  The industry body, Meat & Livestock Australia, decry the inhumane treatment and are working towards a solution. Meanwhile a range of opponents are calling for the ban of live exports, including a campaign featuring cows named Dudley and Arthur by the influential RSPCA.

When and how the ban is lifted will be a balancing act between media coverage, national attention and politics.  At the next ALP (Australian Labor Party) conference the party’s policies towards live export are under review.

All said the issue showcases how investigative journalism can lead the national debate. The original program by “Four Corners” sparked a furor that has yet to die down.  It shows that current affair programs have a leading role in Australian culture and politics, and will continue to play that vital role for some time to come.

Same with text messages - with billions sent around the planet each day, who’s going to read them all, let along look back at the archives?

US Congressman Anthony Weiner has learned the hard way that nothing says forever like Twitter. This Democrat from the state of New York was shamed yesterday when announcing lewd images and messages had been sent by him. Earlier when the messages were unearthed he claimed his account had been compromised.

The sordid affair reeks on two levels. First we don’t expect elected representatives to be sending near-naked images of themselves to housewives. (His famous chest shot is in today’s The Australian but you have to search Google images to find his underwear image. Apologies for not hot-linking that memory.) Nor do we expect to find their text streams with porn actresses.

But once the news has been discovered, the second level of disappointment comes from the series of lies told to feebly cover the trail. Congressman Weiner claimed his Twitter account had been hacked and those images of him were sent by someone else. (Amazingly most thought photos of his near naked torso would be kept in a location safe from hackers.)

In true Washington fashion, Congressman Weiner held a press conference and apologised. His confession was coupled with tears of shame. Today the on-line and traditional media are covering “Weinergate” - see The Daily Conversation on YouTube.

For those familiar with Twitter and Facebook and texting, there’s no need for a reminder that these messages are permanent. Ask the college student who posted he was too hungover to go to work but forgot that he’d friended his boss. Ask any of the overnight celebrities made famous (or infamous) by YouTube. (Don’t cry for UCLA Girl - her video rant against Asians in the library went viral and she wound up leaving UCLA.) But for a newcomer the flickering screen of message after message leads to the incorrect assumption that these messages last moments.

Nothing could be further from the truth. Just ask Congressman Weiner. The fact that each message is saved and stored and archived means a quick review of the account brings up all a person’s postings. And it looks as if there will be a permanent, open archive of all these Tweets.

In April last year Twitter announced the US Library of Congress would archive every Tweet since the platform’s inception.  That will give tomorrow’s historians ample materials to research.

Maybe they’ll help future generations of Congressmen understand that nothing says forever like Twitter.

Starting out exploring next steps had me rattling my network of business contacts and acquaintances. In early April all replied it would be best to wait until after Easter. The pending holiday allowed a three week period where decisions could be deferred. And after came the Federal Budget, so it made sense to delay meetings until after. And now some are considering delays until the new financial year.

Reflecting this new climate of indecision, The Australian and UBS hosted a seminar in Sydney yesterday featuring Prime Minister Julia Gillard and top CEOs. The only upbeat enthusiasm came from the government as it attempted to sell its budget. Meanwhile businesses warned of a growing downturn in Australia’s economy. (see today’s The Australian for full coverage).

Reasons for the concern? Increased cost of living leading to rising wage pressures is top of the list. Add to that rampant growth in the minerals and mining sector and you have upward pressure on inflation. To contain that the Reserve Bank has been steadily raising interest rates. The Australian dollar has gone from its laughable status as the “Pacific Peso” to a highly coveted currency worth much more than its American counterpart. Housing prices are on the climb. And don’t even mention bananas - these golden fruits became worth as much as the metal when a cyclone destroyed growing fields, while import restrictions mean foreign bananas remain banned. (Today’s price is $17 per kilo or $8 per pound.)

The two speed economy is really showing signs of strain. On one gear its in over-drive with rising ore prices sending the minerals sector into rapid growth. Back in the cities consumer fight to afford everyday items and businesses grow increasingly concerned.

Australia never experienced the full force of the Global Financial Crisis (GFC) but it seems the aftermath is starting to pack a punch.