My Take

How Hong Kong's propertied class found favour with the government

PUBLISHED : Friday, 11 July, 2014, 4:31am
UPDATED : Friday, 11 July, 2014, 4:31am

It's rare to find lawmakers Alan Leong Ka-kit and Abraham Razack on the same side of the fence. But the arch pan-democrat and the property tycoons' man in Legco have both come down hard on the government for selling land to private developers or converting it to other uses. It was originally earmarked to build public housing. Now we know why the queue for public housing just gets longer and longer.

Razack's ultimate backers benefited mightily from those land purchases. Where was he when it was actually going on? Both Leong and Razack belong to Legco's Public Accounts Committee. What the committee finds - or rather borrows heavily from the Director of Audit's report - is that 24 plots of land originally reserved for public housing were returned to the government between 2001 and 2013 and eventually sold to developers or converted to other uses.

The government justified the policy because "other uses [were] to tie in with local development needs" and it was necessary to "fully utilise the economic benefits of individual prime sites". Well, at least the government was honest about it in the second part. In plain English, it meant it could make far more money selling the land than building public flats.

Under the two post-handover administrations of Tung Chee-hwa and Donald Tsang Yam-kuen, the Home Ownership Scheme was killed, regular land auctions were halted and the building of public housing flats slowed significantly. That's partly why the last decade was such a gravy train for the big property boys. We are now living with the dire consequences.

The two reports should be read with an earlier one by the Legco Secretariat's research unit, which found John Tsang Chun-wah, as finance chief, since 2007 gave away HK$220 billion in one-off sweeteners - of which 28.7 per cent went to property owners; 23.5 per cent to all taxpayers; and only 3.9 per cent to low-income groups and 7.6 per cent to disadvantaged groups.

How Tung and Tsang favoured the propertied class was just obscene. Leung Chun-ying has inherited this housing shortage problem and is at least trying to address it. But his 10-year target of 470,000 flats - of which 200,000 will be public units - may not be enough even if all are built on time.