XN000022-1972-05-10 — Page 2

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Wednesday, May 10, 1972

FULL MARKET VALUE ASSESSMENT

Wrong In Principle And Practice

The Hon. Wilfred Wong today urged the Government to reconsider,

for economic and social reasons, the present "empirical" formula of

assessing Crown rents.

He said that for the Government to charge what the market

could bear was wrong in principle and practice."

He was speaking at the Legislative Council in support of a

motion by the Hon. Oswald Cheung that the Council would welcome a thorough

review by Government of its policy.

Mr. Wong said: "It might have been tenable in the hey day of

pure laissez-faire for a Carnegie, a Rockefeller to charge what the

traffic can bear. It should not be the case with Government in this day

and age.

He said that inflation must and can be restrained, otherwise

the effect on rents and hence the cost of living would be disastrous

in pricing Hong Kong out of the world market.

He pointed out that the existing formula which contains 5 per cent

compound interest over 75 years increases the original figure of the rent

by four times. The formula which he favoured for Crown rents for leases

renewable for both 75 years and for a shorter term was 1/75th of the value

of the land, without charging any interest at all.

This, he said, would be in the interest of stabilizing the cost

of living and of the present lease-holders.

/Mr. Wong