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The following is the speech by the acting Secretary for Planning, Environment and Lands, Mr Patrick Lau Lai-chiu, at the motion debate on resumption of land sales in the Legislative Council meeting today (Wednesday):

Madam President,

Few Government decisions in the last few months have generated as much ongoing public discussion as the moratorium on land sales. The diverse views on the decision itself, and the arguments either urging or cautioning the Government to lift the moratorium after March 31 next year, have already been reported widely in the media. They are largely heard again today in this motion debate.

Some Members have spoken on the adverse impact of the moratorium on the operation of the economy, employment in the construction industry and related professions, and small and medium-sized property developers and related professionals. Others expressed concern about its impact or that of its extension on future housing supply and on Government revenue.

I do not propose to rehash today the rationale of the moratorium which was introduced as part of a package of exceptional measures to bring relief to the economy. It might have come as a surprise to most people but it was certainly not a hurriedly-made decision. We should perhaps ask ourselves what might have happened to our property market, our stock market, our employment, our economy and indeed the confidence of our community if Government had chosen not to introduce those special relief measures at that time.

Honourable Members today have offered the Administration their views and suggestions on two aspects of land disposal next year. The first aspect is whether Government land sales should resume in April 1999 and what factors the Administration should take into account in reaching a decision on the question.

I would like to inform Honourable Members that the Administration has indeed been closely monitoring all relevant factors including most of those highlighted by the Hon Ronald Arculli and other Members in this debate. I am glad that the Administration and Honourable Members largely see eye to eye on the factors concerned and the guiding principles for the formulation of a land sales programme. However, there is no consensus on when land sales should resume. The Chief Executive in his Policy Address stated clearly that the Government will decide early in 1999 whether or not to lift the moratorium, having regard to the need to ensure stability in property market. There are still more than four months before the expiry of the current moratorium, and we have all learned from recent experience that the market could be more volatile and demand for housing and land could be more elastic than we would expect. Moreover, economic and political developments in Asia and around the world beyond our control are even more of a wild card in the equation on when land sales should resume. In this regard, even within a short period of the last few weeks, there has been a noticeable evolvement in the views in certain quarters on whether land sales should resume next April. This goes to show that there is no need for us to rush into a decision at this stage. It is important, though, that whatever decision the Administration will be making, it must take into full account developments in the coming months and must provide a clear message to developers and homebuyers alike on its land disposal plans.

Notwithstanding the moratorium, we are pressing on with our efforts to make ready the sites covered by our five-year land disposal programme announced in March this year for disposal in accordance with the timetable. To avoid possible misunderstanding, let me stress that "ready for disposal" does not mean we have already made up our mind. The Steering Committee on Housing and Land Supply chaired by the Financial Secretary has continued to meet regularly to supervise the production of adequate land for housing development. This is necessary to ensure that whenever land sales resume, we will have an adequate supply in hand.

The second aspect of land disposal next year on which Members have expressed concern is how land might be best disposed of to fully achieve our land policy objectives and with regard to the interests of various sectors of our community. Some Members have suggested that the resumption of land sales could start with smaller lots, or upon application etc. I am grateful to Members for their various suggestions on how to render our land sales programme more flexible and more in tune with market demand and reception. Some of the suggestions have indeed been our practice, an example being the sale of smaller lots. About 60 per cent of the total number of sites sold by the Government in the last five financial years were smaller than one hectare in size. Other suggestions such as sales upon applications will require further consideration. If Members in the meantime have other practical suggestions, we will also consider these suggestions with an open mind. The Government's objective, if and when land sales resume, is also to implement a clear but flexible programme responsive to demand for land and housing and at the same time striving to stabilise the property market and Government revenue.

Thank you, Madam President.

End/Wednesday, November 18, 1998

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