TNAG-1362-FCO40-1808-Hong-Kong-Hansard-reports-and-minutes-of-the-meetings-of-the-1985 — Page 182

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result. But the reservoir of public rental tenants prepared

to move to home ownership is limited because the increased financial commitment involved can still present a problem.

I do not believe therefore that carrots should be off the

menu forever, although I accept that judicious use of the

stick by way of higher rents for those who can afford them

may prove necessary. For this reason although I listened

with great interest to Mr. Wong Lam's speech, I am reluctant

to pursue in the short term his suggestion that we should

include an element of land value in the price of home

ownership flats. The price of our home ownership flats is

between 14% and 25% below those in the private sector and

with the restrictions imposed on the re-sale of home ownership flats this margin is not great. I believe we should aim

at further increasing the numbers of tenants who are prepared

to purchase home ownership, so that the high level of

production of public rental housing could be reduced in

the long term. This would be an alternative, and I suggest

more certain way of reducing government expenditure than

by risking a drop in sales of higher priced home ownership

flats.

Sir, may I strongly support Mr. Hu's point that

the Housing Authority should do everything possible to contribute more towards the cost of the housing programme.

The Housing Authority already finances 37% of total

expenditure and this will rise to 65% by 1988-89. But we

accept that we need to do more to reduce our dependance on

government funding and are continuing to explore schemes

and policies to that end. If we are to maintain our present

high level of production, it is incumbent upon us to try

to ensure that the housing programme is insulated as far as possible from any downturn in the Hong Kong economy on the one hand, and competition from other social programmes

on the other.

/Dr. Henrietta