A real loss

PUBLISHED : Saturday, 07 January, 2012, 12:00am
UPDATED : Saturday, 07 January, 2012, 12:00am

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The Housing Authority earlier this week announced a HK$3.5 billion surplus for the financial year, a smaller amount than was originally projected. Market turbulence and higher salaries and operating costs caused its surplus to fall by about HK$1 billion from the earlier estimate.

In particular, the estimated balance of its funds management account dropped from a forecast of HK$3.1 billion to HK$2.1 billion, and its cash and investment balance could dip to an estimated HK$50 billion in 2015-16, the lowest in 10 years.

The authority has only itself to blame for having descended into this desperate situation. It all comes down to the government's decision to stop building and selling public units under the Home Ownership Scheme (HOS) in 2002, a few years after the Asian financial crisis. It was exceedingly short-sighted.

On top of that, the authority did not consider the consequences when it decided to sell public shopping malls and car parks to The Link Reit. These public assets were sold to the property investment fund, which was subsequently listed on the Hong Kong stock exchange, at too low a price.

The sell-off added some HK$20 billion to its capital, which it invests to generate income to cover the building and maintenance of public units. The Link Reit is now worth HK$63.55 billion and makes an annual profit of some HK$4 billion. Only facts speak the truth: the authority did sell public assets on the cheap.

Some of the main social functions of public shopping malls and their related facilities include serving residents and acting as a counterbalance to rents in the private market to allow small businesses a chance to survive.

Rents from public shopping malls and related facilities used to be one of the authority's major recurrent incomes, and together with the profits from selling HOS and public housing units, the amount was more than sufficient to support the running of public housing policies in Hong Kong. Therefore, we should never stop building and selling public units and should not have sold our public shopping malls and other public assets at a discount.

This issue was recently brought up by democrats seeking nomination as a candidate for chief executive. One hopeful, Frederick Fung Kin-kee, criticised fellow pan-democrat candidate Albert Ho Chun-yan for supporting the listing of The Link Reit. Fung was initially against the listing while the Democratic Party backed it. But, in the end, when the media also supported the idea and public opinion gradually shifted in favour of the listing, Fung and other democracy camp legislators kept quiet and did nothing to help a minority, including myself, who tried to block the listing in a judicial review so as to protect the public interest.

Hongkongers should not allow politicians to pull the wool over their eyes and must exercise their voting rights wisely to monitor the government and politicians effectively.

The Link Reit debacle serves as a mirror, reflecting the bad and ugly sides of politicians. Those who have sold out the interests of the people have nowhere to hide now.

Albert Cheng King-hon is a political commentator. taipan@albertcheng.hk