The financial secretary has dismissed criticism that the government was too slow in taking full control of Hong Kong’s land supply by scrapping the application list system, which was announced on Thursday.
Speaking on an RTHK English programme on Friday morning, John Tsang Chun-wah emphasised that the government took control – away from developers – as early as last year.
“In fact last year, most land sales were done through government-initiated sales – more than a couple of dozen of pieces of land,” he said.
“Every quarter we [had] about six to seven pieces [of land], so in fact we actually took control of the sales… We had quite a large income from land sales last year, because of the increased number of plots we sold.”
This week’s scrapping of the application list system would not have a significant impact on public revenues, he said.
On Thursday, Secretary for Development Paul Chan Mo-po announced the end of the system, which has operated since 1999.
Chan said the government had been releasing sites for sale – without waiting for developers to bid for them on the application list – since the end of 2011.
“[But] the public misunderstood that the control of the land supply remained in the hands of developers. We decided to scrap the system to clear all doubt,” Chan said.
Tsang stressed on Friday morning that land supply remains the key to Hong Kong’s housing shortage. “Interest rates have remained low for quite a long time, and I think the demand will continue. So we have to continue with increasing the supply in the future… Meanwhile, we are trying to narrow the buyers’ spectrum [so local residents will be given priority],” he said in a reference to recent market-cooling measures launched by the government.
He estimated that 24,000 flats will be available in the market this year, while another 67,000 will come into the market in the next three to four years.
Tsang also countered criticism that he was too conservative in predicting the government’s surplus.
“I think it’s a virtue for a finance minister to be conservative, and I hope I don’t change too much in that,” Tsang said.
He pointed out that the government will be spending HK$440 billion in the coming year – 15.6 per cent more than last year – adding, “you will not see another economy with that scale of spending”.