Approval for civil servants' housing package
LEGISLATORS yesterday approved an improved housing package for civil servants to keep pace with property prices and tighter mortgage lending.
The Finance Committee agreed to raise the rate of monthly housing allowance by a rate of 8.7 per cent, which would require an additional $13.4 million a year.
''Rising property prices have eroded the real value of the housing purchase allowance since it was last increased in October 1990, making it more difficult for junior civil servants to buy a home,'' the Government said in a paper.
The improved package also allowed a raise in the Government's down-payment loan ceiling to staff from 20 per cent to 30 per cent of the property price or 24 months of the officer's salary, whichever was less.
''Raising the ceiling on the down-payment loan will result in an additional cash outflow of $110 million a year but will be cost neutral in the long term as the loans are repaid with interest,'' the paper said.
Liberal Party legislator Ronald Arculli, however, disagreed that the arrangement could be ''cost neutral'', as the Government could have used the money to invest in areas with a higher rate of return.
''There is definitely a subsidising element in the scheme. It cannot be cost neutral,'' he said.
United Democrat legislators asked if the ceiling would be pulled down if property mortgage lending was relaxed.
Deputy Secretary for the Civil Service Fanny Law Fan Chiu-fan said only that the Government would review the scheme if the situation changed.