XN000022-1980-01-24 — Page 14

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However, while there is little the Government can do to cushion

Hong Kong against the effects of rises in world prices generally, we were

only too well aware during last year that, in spite of the economy's move

towards greater stability, there was still an unacceptably high level of

domestically-generated inflation. This was particularly true of one

important sector: the property market.

1979 saw prices of flats escalating to dizzy new heights and

there was evidence of unreasonable levels of rent-increase being asked

by landlords. As you all know, last month Government decided to extend

rent-incease control to domestic tenancies not previously covered, and

schemes are presently being considered to curb speculation on uncompleted

flats. I am told that, these measures while still only proposals and yet

to be fully debated in Legislative Council, have already had a calming

effect on the domestic property market. This is good.

At the same time, the Government has, in particular, kept a firm

grip on the growth of Public Works, When we had, perforce, to decide where

to slow down the rate of growth of Government's capital expenditure, the

least possible reduction in speed was applied to our public housing programme

This was clearly right and proper in view of our severe housing shortage,

but in doing this it has inevitably meant that we have had to delay a number

of other important projects (and you, Mr Chairman, have mentioned some,

including the HK Island Eastern Corridor and the Tai Po Coastal Road).

I assure you that these and other items will be re-introduced into our

capital spending programme just as soon as this can be done without too

much risk of further fuelling our domestically-generated inflation.

I want to say that once more: just as soon as our domestically-

generated inflation is down to a reasonable level, then we can go ahead

/with the.....