Serious attempt to battle costs demon
S Y Choi of Coopers & Lybrand
ONCE again inflation is the major problem we face. Although reduced to 8.5 per cent, it is still above the level enjoyed in Organisation for Economic Co-operation and Development countries.
At least this year there is a serious attempt to address rising property prices.
As was predicted last year, liberal measures to improve the purchasing power of potential property owners brought little if any relief in the short term and helped fuel demand later in the year.
Similarly, the proposed reduction in stamp duty will only help widen the supply and demand gap in the next year.
On a more positive note, Sir Hamish is attempting to increase supply in the medium term. Relaxing planning controls and increasing government staff in this area is welcome.
Similarly, it is good news that 62 hectares of airport railway development land will be released for commercial, residential and other use.
Although these proposals will only have an impact on supply in the medium term, an unequivocal message is being given to speculators that the supply and demand mismatch they currently enjoy will not last.
Sir Hamish should also emphasise the need to increase the supply of low-cost housing for sale when discussing how the Housing Authority's $15 billion should be spent.
A sizeable proportion of this money should be used to build new flats to be sold at, or close to, market rates. Similarly, the refurbishment programme should include vacant flats.
Our shortage of skilled labour continues to be a problem. The proposal to import 1,000 skilled graduates from the mainland is a step in the right direction.
Not only will it add some relief, it will also help strengthen our ties with China.
We still face a huge skills gap in Hong Kong which needs to be remedied through widespread training. It is disappointing that the Government, once again, lost the opportunity to announce funding for such a programme.
Transport systems are creaking seriously and this is now being recognised. For the long term, Sir Hamish's proposals are sound.
In the short term, we need decisions and we need them quickly. A short timetable should be given to the working party considering new proposals so that action is taken before Hong Kong people and business are strangled by their own transport systems.