XN000022-1979-10-31 — Page 11

WEDNESDAY, OCTOBER 31, 1979

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HE SAID MANY SOLUTIONS HAVE BEEN TRIED ELSEWHERE AND TO A LESSER EXTENT HERE BUT ONE THING SEEMS CLEAR THERE WILL HAVE TO BE, IN SOME SHAPE OR FORM, MUCH MORE GOVERNMENT INTERFERENCE WITH THE PRIVATE SECTOR THAN HÔNG KONG HAS BEEN WILLING TO TRY UP TO NOW.

+THE HOLY COW OF SUPPLY AND DEMAND WILL HAVE TO BE SACRIFICED. THE BEAST IS ALREADY DEAD ANYHOW BECAUSE IT IS NOW CLEAR THAT THE UNCONTROLLED PRIVATE SECTOR, WHATEVER IT MAY CLAIM IN THE PAST, IS NOT ABLE OR WILLING TO PRODÚCE WHAT WE NEED AT A PRICE WE CAN AFFORD.+

SPECULATORS CAN BUY AND SELL PROPERTY FOR LARGE PROFITS, SOMETIMES TWO OR THREE TIMES OVER, BEFORE THE BUILDING OF THE PROPERTY HAS EVEN BEGUN. THE RESULT OF THIS SPECULATION IS THAT THE END USER, WHETHER TENANT OR OWNER, PAYS MUCH MORE THAN IS NECESSARY OR REASONABLE OR JUST, FR. MCGOVERN SAID.

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OR

HE FELT THAT FRIGHTENING OFF CERTAIN TYPES OF DEVELOPERS MORE ACCURATELY SPECULATORS IN SOME SORT OF RELATIONSHIP WITH DEVELOPERS WITH GOVERNMENT INTERFERENCE, WOULD BE NO LOSS TO THE INDUSTRY. IT WOULD BE A GAIN FOR BOTH THE COMMUNITY AND FOR HONEST DEVELOPERS.

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HE PROPOSED A PRIVATE SECTOR HOME OWNERSHIP SCHEME+, WITH THE GOVERNMENT OFFERING LAND AT A FAIR PRICE, AS OPPOSED TO THE OVERHEATED MARKET PRICE WHICH HAS BEEN AT THE BASE OF THE HIGH-PRICE PROPERTY SPIRAL.

THIS COULD BE DONE BY AGREEMENT WITH SPECIFIED CONTRACTORS WHO IN TURN WOULD CONTRACT TO BUILD HOUSES FOR DIRECT SALE TO FIRST OWNER OCCUPIERS AT A CORRESPONDINGLY FAIR PRICE.

HONEST DEVELOPERS WOULD NOT OBJECT TO THIS PROPOSAL AS A FAIR PROF IT WOULD BE INCLUDED IN THE FAIR PRICE, FR. MCGOVERN SAID, OR WOULD THE FINANCE BRANCH +SINCE WE HAVE BEEN ASSURED THAT ANY RELATIONSHIP BETWEEN THE HIGH PRICE OF LAND AND THE GAIN TO REVENUE IS ENTIRELY ACCIDENTAL,+

SOME MIGHT SAY THAT NOT CHARGING THE MAXIMUM PRICE FOR LAND WOULD BE THE EQUIVALENT OF GIVING A SUBSIDY TO THE CONSTRUCTION

INDUSTRY, HE SAID, BUT HE WOULD NOT LOOK ON IT THAT WAY.

IT WOULD BE FAIR, HE THOUGHT, TO DESCRIBE SUCH A POLICY AS GOVERNMENT PUTTING INTO PRACTICE THE ADVICE WHICH THE GOVERNOR GAVE TO THE PRIVATE SECTOR IN HIS ANNUAL POLICY SPEECH WHERE, AS A REMEDY FOR INFLATION, HE ADVOCATED MODERATION EVEN THOUGH THIS

INVOLVES FOREGOING SOME SHORT-TERM PROFIT FOR THE SAKE OF LONG-TERM STABILITY.+

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