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80.
(A) Rents
Theoretically, there are a number of ways in
which inflation could be generated internally and I shall now deal with six which could possibly be operating at this time, beginning with rents.
81.
In 1973708vernment introduced a rent freeze for domestic premises and this was followed by the enactment of extensive new controls limiting, in most cases, increases in rents to a maximum of 10% per annum. The only premises excluded from these controls are new premises built after 14th December 1973; and, of course, post-war commercial and industrial premises.
82.
This has led to a renewed attack on rents for non- residential premises. My honourable Friend Mr. Hilton Cheong-Leen, for example, argues that these rents have risen rapidly. This was the case in the first half of 1973 and the rates of increases are shown clearly in the Economic Background publication. To an extent these were the result of the very sharp increases in the money supply in 1972 and in the early part of 1973, which not only had an influence on share prices but on property prices as well. I have consistently maintained that the slowing down in the rate of growth of the money supply to 6% in 1973 compared with 29% in 1972 and 24% in 1971 would itself have a stabilising influence on property prices and on commercial rents, and the latest figures assembled by the Commissioner of Rating and Valuation amply support my confident expectations. In the case of shops, rental increases in the second half of 1973 amounted to only 3% compared with 18% in the first half. In the case of offices, the increase in the second half was 11% compared with 38% in the first six months; whilst, in the case of commercial flatted factories, the increase was only 1% in the second half compared with 6% in the first half.
I hope honourable Members can agree, that the situation is now easing
up.
83.
I am opposed in principle to the general proposition of controlling rents of non-residential premises, on the grounds that it is manifestly unfair to restrict the profits of
/one....