I REFER to the letters headlined, ''End housing allowance anomaly'' (South China Morning Post, June 9) and ''Civil Service housing strategy problem'' (Post, June 19). The Private Tenancy Allowance (PTA) is intended for eligible civil servants to rent accommodation. As such, it is necessary to revise the rates of allowance annually to keep up with rental movements in the market. The Home Financing Scheme (HFS) was introduced on October 1990 with the main objectives of encouraging home ownership amongst civil servants, modernising the provision of civil service housing benefits and reducing the long-term government expenditure onhousing benefits. Eligible civil servants are provided with a monthly allowance, which is payable for a maximum of 10 years to cover mortgage payment. When the HFS was introduced, it was estimated that some 4,300 would join the scheme in three years. As of March 31 of this year, nearly 5,900 civil servants have joined, about one-third of whom were former PTA recipients. The scheme is, therefore, a remarkable success. The Administration is not oblivious to the fact that some PTA rates have overtaken the corresponding HFA rates. A small differential may be tolerated on the basis of the value-added to home ownership. However, I would agree with your readers that it would defeat the purpose of the HFS if the trend was allowed to continue. The problem is being addressed but, as a responsible Government, we must carefully assess the financial implications and the impact on the property market of any proposal to revise the HFS rates of allowance. We shall consult staff when there are concrete proposals to offer. JACK J. C. CHAN Principal Assistant Secretary for the Civil Service
