XN000022-1997-03-13 — Page 4

Question 2 (in Chinese): I would like to ask about land supply. In your Budget Speech you mentioned that land supply is a long term thing but what about short to medium term? Your Budget Speech mentions that in the near term there is still pressure for property prices to go up but we don't see any special measures in order to dampen speculation. So are you going to allow property prices to continue to rise in the coming couple of years?

Mr Donald Tsang (in Chinese): Indeed there is some pressure in the market. Probably in the coming couple of years the supply will still not be as abundant as the time further beyond that, however the supply will increase by 46% over the next five years. And as I said, I am going to get together with my colleagues and we will try to find ways in order to streamline our internal procedures and then also to see whether we can put together a further increase in supply beyond the increase of 46%. And there are other things we could do. Of course those will be administrative measures and if there is evidence to show that speculation is getting out of control we will put together administrative measures which can happen very soon. It could happen within one day. We could make an announcement within one day and so no speculation is called for on what we are going to do.

And also, the government has some quarters and the government has its own Home Purchase Scheme for the civil service and that is why some of the quarters have been vacated. And in 1997 we can put into the market for sale large residential flats numbering 400 and that should relieve property prices somewhat.

Question 3: Mr Tsang, could you outline what, if any, risks there are to changes in the Budget following the handover, from the provisional legislature? Is that a legitimate concern, that there could be some changes?

Mr Donald Tsang: As far as I am concerned my top priority at the moment is to secure the agreement of the Legislative Council to my Budget. I am working one step at a time, like Mr Tung said. I think this is the best tactic for the time being. But we must all remember, the Budget I am proposing to the legislature now is one which has been agreed by an expert group set up under the Joint Liaison Group. In other words it has been agreed by Hong Kong Government, prepared by the Hong Kong Government, and agreed also by the Chinese Government. It has been a joint enterprise. So for that reason, I am reasonably confident that it will command the support of the Chinese side as well as the Chief Executive. So there you are. My priority, as I said, is to try to get my LegCo to agree it for the time being.

Question 4 (in Chinese): Mr Tsang, you said that in the coming year you have large civil service quarters being put out but the speculation in the market is about large flats and this speculation may go down to medium and small flats. And in your Budget you say that the stamp duty for flats below $4 million will be relaxed. But you said that last year, upon the relaxation, the property prices more or less offset the concession. Do you have confidence that this proposal this time can really ease the situation about small flats below $4 million?