Public for war against speculators

HONG KONG has overwhelmingly thrown its support behind Governor Chris Patten's proposed crackdown on property speculation.

An exclusive Sunday Morning Post opinion poll reveals that 79 per cent of those surveyed believe the Governor was right last week to identify rising property prices as an urgent problem. Only eight per cent disagreed, while 13 per cent were unsure.

Speculation was almost universally identified as a major cause of the soaring prices by the poll's respondents. There was strong support for tough new measures to control it, including a controversial capital gains tax on speculators.

The poll also uncovered startling new evidence of the effect rising residential prices is having on ordinary people.

Only six per cent of those surveyed said they were intending to buy a flat at present, in the Hong Kong Polling and Business Research (PBR) survey of 1,055 people.

Forty-nine per cent were less likely to buy a flat because of recent price rises, while only four per cent said this had made them more likely to do so.

A further 43 per cent said recent events had not affected the prospect of them buying a flat, while four per cent were unsure.

The poll was conducted last Wednesday and Thursday, immediately after the Government announced the establishment of a multi-disciplinary task force charged with cooling the property market. The response rate was 62 per cent.

PBR managing director Citi Hung Ching-tin said the results showed the Government had pinpointed the issue of most immediate concern to people. ''The Governor is reaping the political windfall of correctly identifying the issue of the day that is hitting the lower classes,'' he said.

Mr Patten last week pledged that ''the number one domestic issue on my agenda will be property prices''. The Financial Secretary, Sir Hamish Macleod, and the Acting Secretary for Planning, Environment and Lands, Canice Mak Chun-fong, also pledged the Government would take action to bring down prices.

Ninety-three per cent of those surveyed saw speculation as a main cause of the soaring market.

But most respondents believed Hong Kong property developers and other local purchasers were primarily to blame, rather than mainland firms, which had recently been accused of fuelling the rising prices.

Seventy-eight per cent believed speculation by local developers was a major factor behind the runaway market, while 76 per cent believed the activities of other Hong Kong purchasers were an equally important contributing cause.

Only 50 per cent identified speculation by Beijing-backed enterprises as a major contributor to the increase in prices, fewer than the 58 per cent who saw the lack of land in Hong Kong as a key factor.

Forty-nine per cent saw Government policy as a major cause, while 39 per cent identified Hong Kong's booming economy.

But Mr Hung warned that the support the poll showed for Mr Patten's tough stance on property prices could prove to be a double-edged sword if he failed to cool the market quickly.

The survey found 79 per cent of respondents believed the Government had waited too long before taking action, while only six per cent disagreed with this, with 15 per cent unsure.

''This could be extremely dangerous for the Governor,'' Mr Hung said. ''If he fails to deliver on the issue, then the high expectations will backfire.'' The poll findings suggest the most popular course would be immediate action to try to control speculation and begin building more public housing. Both options were backed by 85 per cent of respondents.

But there was also strong support for a capital gains tax on speculators, which won the support of 74 per cent of respondents.

Other, less-favoured options included discussing an increase in land supply with China, backed by 62 per cent, and making it easier for redevelopment, which won the support of 45 per cent.

The Government has always opposed the introduction of a capital gains tax on speculators, although Sir Hamish last week said he would consider it if other measures were ineffective.

The poll's revelation of public support for such a levy came as pro-democracy politicians yesterday renewed calls for its introduction.

''The problem cannot be solved only by releasing more land. We must also have some taxation measures to punish speculation,'' said United Democrat legislator James To Kun-sun, who described a tax on short-term property gains as a vital part of the battleagainst rocketing residential prices.

Law Cheung-kwok of the Association for Democracy and People's Livelihood also said a tax on speculators was essential.

''Property prices will not reach a reasonable level within the next two or three years if only those suggestions are acted upon. Taxation measures must play a vital role in dealing with the problem,'' he said.

But Liberal Party spokesman Man Tak-chuen opposed the introduction of a capital gains tax because ''we couldn't easily identify those who are speculators and those who are not''.