The land-sale system is in need of reform. But the minor adjustments announced by the government on Tuesday - in response to calls for change from property developers - do not go far enough. There is a need to make the system more transparent, consistent and market-driven. Amendments to the application list system, through which land is put up for auction, were made effective immediately. An auction will now be held when a property developer makes a bid for a site on the list which meets at least 80 per cent of the government's valuation. Previously, the bid had to be at least 100 per cent of the so-called reserve price to trigger an auction. The change could help trigger more auctions. However, that will be mitigated by the government's continued insistence on keeping reserve prices secret and reserving the right to revise them right up to the day of auction. Developers complain that officials have done nothing to improve the opaque pricing mechanism, which they say sets too-high reserve prices and has resulted in an undersupply of land. In fact, many want the government to scrap the list system and resume regular land auctions. The Real Estate Developers' Association argues that this would allow smaller developers, which do not have large land holdings, to grab a fairer share of the property market. For its part, the government maintains that it must keep its price list under wraps to prevent bidders colluding. And it so far sees no need to resume regular auctions because it believes the application list system is working. That is highly debatable. In the past three months, bids for five sites on the list failed because they did not clear the official reserve prices, and there has been no auction of residential sites since October. These are clearly signs that the system is having problems matching demand and supply. At this point, developers should give the modified application list system a chance to prove itself. But the government must also recognise the need for further reform of its land-sale policy. In this regard, it is encouraging to hear new chief executive Donald Tsang Yam-kuen talk about the importance of allowing the market to set land prices. As with other major issues, though, he must remind himself that talk not backed up by action is useless. We hope he will press the Lands Department to come up with more options. The government should start by frankly assessing how big a role it is playing in the setting of land prices. Officials like to describe the list system as 'entirely market-driven'. But this is a stretch. For starters, it is they who decide which sites will go on the list and determine the trigger prices for auction. Moreover, this minimum-bid requirement was introduced during a period of collapsing prices in a deliberate attempt to promote the 'stable development' of the property industry. Now that the market has rebounded, the government's resolve to hang on to the mechanism is fuelling suspicion that it is again pursuing a high-land-price policy reminiscent of the latter days of the colonial era. It is a tempting strategy for anyone who leads Hong Kong, a place where land sales have always contributed the lion's share of government revenue. Restricting the supply of land means higher property prices - the engine of the local economy. And in the ensuing boom, the government's coffers are amply filled without resorting to such unpopular measures as a goods and services tax. But the down side of such manipulation is a distorted market and a volatile, boom-and-bust cycle. The pain this can cause is fresh in the collective memory. This is why Mr Tsang would be wise to make a break from the past and do his best to place both Hong Kong's economy and government finances on a more rational and sustainable path. When it comes to government interference in the property market, less is definitely more.