XN000022-1980-02-13 — Page 7

WEDNESDAY, FEBRUARY 13, 1980

5

SIMILARLY, IF THE GOVERNMENT HAD TO PAY EXCESSIVELY HIGH RENT, GOVERNMENT EXPENDITURE WOULD BE INCREASED AND THIS COULD ONLY BE MET BY INCREASED TAXATION, THE RESULT OF WHICH WOULD BE THE TAX-PAYERS SUBSIDISING THE LANDLORDS.

DR HUANG ALSO QUERIED THE EQUITY OF THE 21 PER CENT CEILING FOR RENT INCREASE FOR ALL CATEGORIES OF PREMISES.

HE AGREED THAT A 21 PER CENT INCREASE EVERY TWO YEARS SEEMED REASONABLE FOR PREMISES TO BE BROUGHT UNDER CONTROL AS FROM DECEMBER 18, 1979 BUT SUGGESTED A HIGHER PERCENTAGE OF INCREASE FOR THOSE ALREADY UNDER CONTROL BEFORE THAT DATE SO AS TO NARROW THE GAP BETWEEN THE CONTROLLED LEVEL AND THE PREVAILING MARKET RENT.

MR F.K. HU ALSO CALLED FOR A HIGHER CEILING OF RENT INCREASES.

THE 21 PER CENT INCREASE, INTRODUCED IN 1973, COULD HARDLY COVER THE BANK PRIME RATE AND IS BELOW THE CURRENT INFLATION RATE, HE SAID.

+ALLOWANCE MUST BE MADE FOR THE LANDLORD TO ADJUST RENT FIXED IN 1976 AND EARLIER, 1977 AND 1978, TO 1979 LEVEL BEFORE THE 21 PER CENT INCREASE IS APPLIED.+

BASED ON THE PUBLISHED COST OF LIVING INDEX, MR HU SUGGESTED AN EIGHT PER CENT INCREASE A YEAR FOR RENT FIXED IN 1976 AND EARLIER, 1977 AND 1978, SUBJECT TO THE FINAL CALCULATED FIGURE BEING NOT MORE THAN FAIR MARKET RENT IN 1979.

HE ALSO SUGGESTED THAT THE RENT INCREASE FOR LUXURY FLATS OF RATEABLE VALUE OVER $60 000 IN 1976 ASSESSMENT, OR OVER $30 000 IN THE 1973 ASSESSMENT, AND PREMISES RENTED BY CORPORATIONS AND GOVERNMENTS SHOULD BE A MINIMUM OF 15 PER CENT A YEAR AT THE 1979 LEVEL. AND THAT A 12 PER CENT A YEAR INCREASE BE ALLOWED FOR RENTS FIXED BEFORE 1979.

ON THE PROVISION OF LAND, MR HU AGAIN CALLED ON THE GOVERNMENT TO ENCOURAGE PRIVATE DEVELOPERS TO PARTICIPATE MORE ACTIVELY IN THE PRIVATE SECTOR PARTICIPATION SCHEME OF THE HOME OWNERSHIP SCHEME.

HE SAID MORE SITES IN URBAN AREAS SHOULD BE RELEASED FOR TENDER FOR THIS PURPOSE AND EMPHASIS SHOULD BE PLACED ON SOLVING THE HOUSING PROBLEM RATHER THAN FINANCIAL GAIN OR LOSS ON THE TENDER PREMIUM.

+ INCREASING THE SUPPLY OF LAND MAY SLOW DOWN THE INCREASE IN FLAT SELLING PRICE OR RENT BUT IT DOES NOT NECESSARILY LOWER THE FLAT SELLING PRICE OR RENT FOR THE BENEFIT OF THE LOW AND MEDIUM INCOME GROUPS, HE SAID.

IN THE NEW TERRITORIES, CONSIDERATION SHOULD BE GIVEN TO COMBINE THIS AND THE LETTER B EXCHANGE SCHEME, HE SUGGESTED.

/AS THERE