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result. But the reservoir of public rental tenants prepared
to move to home ownership is limited because the increased financial commitment involved can still present a problem.
I do not believe therefore that carrots should be off the
menu forever, although I accept that judicious use of the
stick by way of higher rents for those who can afford them
may prove necessary. For this reason although I listened
with great interest to Mr. Wong Lam's speech, I am reluctant
to pursue in the short term his suggestion that we should
include an element of land value in the price of home
ownership flats. The price of our home ownership flats is
between 14% and 25% below those in the private sector and
with the restrictions imposed on the re-sale of home ownership flats this margin is not great. I believe we should aim
at further increasing the numbers of tenants who are prepared
to purchase home ownership, so that the high level of
production of public rental housing could be reduced in
the long term. This would be an alternative, and I suggest
more certain way of reducing government expenditure than
by risking a drop in sales of higher priced home ownership
flats.
Sir, may I strongly support Mr. Hu's point that
the Housing Authority should do everything possible to contribute more towards the cost of the housing programme.
The Housing Authority already finances 37% of total
expenditure and this will rise to 65% by 1988-89. But we
accept that we need to do more to reduce our dependance on
government funding and are continuing to explore schemes
and policies to that end. If we are to maintain our present
high level of production, it is incumbent upon us to try
to ensure that the housing programme is insulated as far as possible from any downturn in the Hong Kong economy on the one hand, and competition from other social programmes
on the other.
/Dr. Henrietta