XN000022-1972-05-10 — Page 7

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Wednesday, May 10, 1972

ADVERSE CHAIN REACTION FROM EXISTING CROWN RENTS POLICY

Manufacturers' Burden Should Be Alleviated

The Hon. T.K. Ann said today that the effects from the existing

Crown rents policy could forebode a chain reaction of cut-throat competition,

insolvency, unemployment, labour disputes and social unrest.

He was speaking in support of the motion to call for a review

of the Crown rents policy at the Crown Rents Debate at the Legislative

Council.

Mr. Ann feared that the existing policy, which was intended to

benefit the whole community, could "boomerang to the detriment of all."

He said that the present policy on renewable leases had been

the subject of a recent study conducted jointly by the Hong Kong General

Chamber of Commerce and the Federation of Hong Kong Industries, with the

assistance of information provided by the Crown Lands Office.

The survey

had shown that the present policy would impose a burden on the manufacturers

which was both too heavy and too sudden for them to bear.

The study, Mr. Ann pointed out involved exclusively factories

operating in self-owned premises. If showed that the revised Crown rents,

when related to sales turnover of the respective factories, averaged

2.4 per cent.

"It can be seen then that the increased Crown rents, on the

average, will mean that the manufacturers concerned must either increase

their sale prices by 2.4 per cent, or must reduce their profit accordingly,

so as to pay for the increased Crown rent.

With