I refer to J. Lee's letter ('When money talks, government listens,' South China Morning Post, October 17). Mr Lee has, like many others who blame the former colonial government for the property-market situation, conveniently forgotten some of the conditions of the 1997 handover of sovereignty.
One of the conditions created by the mainland Government was that sales of land by the Hong Kong Government during its last years under British rule would be restricted to a set quantity.
The colonial government was therefore unable to meet the demand for land as indicated by the rapidly rising prices, and therefore unable to slow the inflationary rise to unsustainable levels.
Being dependent on property sales for revenue puts the Government in the position of being interested in pushing prices up and restricting sales to get the most for its land bank.
The best way forward is for the Hong Kong Government to diversify its sources of tax revenue as much as possible to be less dependent on rising property prices. New taxes can be introduced even in the current climate, if they are fiscally neutral by being balanced by cuts in less stable current taxes.
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