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The following is issued on behalf of the Hong Kong Housing Authority:
The Finance Committee (FC) of the Hong Kong Housing Authority (HA) has projected in its proposed budgets and forecasts for the period 2015-16 to 2019-20 that it will have sufficient financial resources to meet its recurrent expenditure and implement its current public housing construction programme and maintenance programme in the five-year period.
Based on the Long Term Housing Strategy Annual Progress Report 2015 announced by the Government last month, the public housing supply target for the 10-year period from 2016-17 to 2025-26 will be 280 000 units according to the latest estimate, including 200 000 public rental housing units and 80 000 subsidised sale flats.
After the meeting of the FC held today (January 5) on the HA's 2016-17 Proposed Budget, the FC Chairman, Professor Raymond So, said, "To achieve the public housing supply target, the HA will come under increasing fiscal pressure in the longer term and the Government's funding support to the HA will become necessary. Depleting at around $10 billion per annum, the HA's cash and investment balance is projected to decrease significantly from the opening balance of about $67 billion in April 2015 to about $16 billion at the end of the forecast period in March 2020, mainly due to the projected increase in construction costs and operating costs. The total construction expenditure during the five-year budget and forecast period is projected to be $120.5 billion, while no rent adjustment for public rental housing is assumed."
Professor So welcomed the Government's earmarking of further funding for injection into the Housing Reserve last month. Together with the initial injection and interest accrued, the Housing Reserve now measures a total of $74 billion, which fully demonstrates the Government's commitment to financially supporting the HA to meet the public housing supply target.
"Given the challenges ahead, the HA has been working on various measures to consolidate cost savings and enhance revenue to ensure that public funds will continue to be used in the most cost-effective manner. The HA will continue to conduct the annual rolling five-year budgeting process and assess its financial position and future funding requirements. The HA will keep close dialogue with the Government. When the two sides have reached consensus on the quantum and timing of funding injection, the Government will, at an appropriate time, seek approval of the Finance Committee of the Legislative Council for funding to be drawn from the Housing Reserve to support the HA's public housing development," he added.
Today, the FC endorsed the Revised Budget for 2015-16 and the Proposed Budget for 2016-17. The FC has also noted the Financial Forecasts for 2017-18 to 2019-20.
The Budget will be tabled at the HA meeting for endorsement on January 18.
Ends/Tuesday, January 5, 2016
Issued at HKT 18:07
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