XN000022-1990-12-05 — Page 9

FURTHER GOVT FUNDS INTO HA INAPPROPRIATE

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THE GOVERNMENT DO NOT THINK IT EITHER APPROPRIATE OR NECESSARY TO INJECT FURTHER FUNDS INTO THE HOUSING AUTHORITY OVER THE $10,000 MILLION ALREADY AGREED, THE FINANCIAL SECRETARY, THE HON SIR PIERS JACOBS, SAID IN THE LEGISLATIVE COUNCIL TODAY (WEDNESDAY).

"THIS DECISION SHOULD HAVE LITTLE EFFECT ON THE OVERALL IMPLEMENTATION OF THE LONG TERM HOUSING STRATEGY.

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"THE TARGET IS STILL TO ACHIEVE THE OBJECTIVES OF THIS STRATEGY BY THE TURN OF THE CENTURY AS ORIGINALLY PLANNED, SIR PIERS SAID.

REPLYING TO A QUESTION BY THE HON LEUNG WAI-TUNG, SIR PIERS SAID GIVEN THE PHILOSOPHY UNDERLYING THE FINANCIAL ARRANGEMENTS BETWEEN THE HOUSING AUTHORITY AND THE GOVERNMENT, THE AUTHORITY'S MANDATE TO MANAGE ITS FINANCES PROPERLY AND PRUDENTLY AND ITS STRONG FUNDAMENTAL FINANCIAL POSITION, THE ADMINISTRATION HAD ENDORSED THIS APPROACH.

HE POINTED OUT THAT TO FACILITATE THE EFFECTIVE IMPLEMENTATION OF THE LONG TERM HOUSING STRATEGY, A SET OF FINANCIAL ARRANGEMENTS HAD BEEN MADE BETWEEN THE HOUSING AUTHORITY AND THE GOVERNMENT IN 1988.

"UNDER THESE ARRANGEMENTS, THE HOUSING AUTHORITY, WHILE REMAINING A STATUTORY BODY, HAS MUCH GREATER FREEDOM IN DISCHARGING ITS DUTIES. IT ALSO ENJOYS A HIGH DEGREE OF AUTONOMY IN MANAGING ITS FINANCES.

"TO ALLOW IT TO EXERCISE THE HIGH DEGREE OF FINANCIAL AUTONOMY, THE GOVERNMENT, WITH THE APPROVAL OF THE FINANCE COMMITTEE, TRANSFERRED OVER $2,700 MILLION FROM THE HOME OWNERSHIP PUND AND CAPITALISED ABOUT $13,500 MILLION WORTH OF OUTSTANDING LOANS AND THE INTEREST THEREON FROM THE DEVELOPMENT LOAN FUND TO THE AUTHORITY.

"IN ADDITION, THE GOVERNMENT AGREED TO PROVIDE THE AUTHORITY

WITH CASH UP TO $10,000 MILLION," SIR PIERS SAID.

THE AMOUNT OF $10,000 MILLION WAS BASED ON THE HOUSING AUTHORITY'S ASSESSMENT IN 1988 THAT A SUM OF $6,350 MILLION WOULD BE SUFFICIENT.

TO DATE, $5,355 MILLION HAD BEEN DRAWN BY THE HOUSING AUTHORITY, AND THE BALANCE WAS LIKELY TO BE DRAWN IN THE NEXT 15 MONTHS, THE FINANCIAL SECRETARY ADDED.

"THE AUTHORITY NOW ESTIMATES THAT UPON THE $10,000 MILLION, IT MAY ENCOUNTER SHORTAGE.

OF

THE FULL DISBURSEMENT SOME SHORT-TERM CASH

MARKET FOR

**TO CATER FOR THIS, THE HOUSING AUTHORITY HAS DECIDED, AFTER DISCUSSION WITH THE GOVERNMENT, TO APPROACH THE FINANCIAL ASSISTANCE," SIR PIERS SAID.

/HE ALSO