One of the major goals to be attained by measures proposed in the new Budget is to invest for the future. Hence investing in innovation and technology is particularly generous, in hopes of creating more favourable conditions for developing high value-added and diversified economy. As long as this is pursued with perseverance, a new engine for economic growth can hopefully be built up. But it is afraid that high land price and high housing price, the largest obstacle to prevent Hong Kong economy from moving up another rung of the ladder, will continue to restrict economic growth and competitiveness upgrading.
It is really imperative for Hong Kong to solve the problem of land shortage. It is hoped that authorities could put into practice concrete plans for cultivating land sites for development in large scale. Among others, at present, reclamation of land from the sea seems the most effective and feasible alternative, to meet the needs for housing, medical care, services for the elderly and economic development. So this must not just remain in endless discussion without any decision ever being reached. In fact, with the record-high fiscal surplus and reserves this year, the government enjoys financial abundance.It is now the right time to start carrying out the plan of reclamation on a full scale.
The Development Bureau yesterday announced the Government's 2018-19 Land Sale Programme, and a move to optimise the land tendering system by publishing the names of the unsuccessful tenderers and their tender amounts on an anonymous basis. This will help increase transparency of land sales. What is worthy of attention is that in the first quarter of the 2018-19 fiscal year, the aggregate private housing land supply from the sale of government sites, railway property development projects, and projects of the Urban Renewal Authority (URA), is expected to provide about 2,400 flats in total, down 30 per cent from a year ago. This inevitably gives the impression that residential housing supply remains limited.
As a matter of fact, short- and medium-term land supply by the government mainly comes from land rezoning, which may meet opposition at any moment from environmental organisations and local people. So there are certain variables in such land supply.
Our nation's economy has entered a new era, providing new opportunities for Hong Kong. If efforts are not stepped up to solve the land shortage problem, Hong Kong's future development will be hampered. Hong Kong economy grew 3.8 per cent last year, and is estimated to grow 3 to 4 per cent this year. With the backing of a $140 billion surplus and over $1 trillion reserves, the Budget proposes to bet $50 billion in innovation and technology. The government apparently has given much thought to this, in the hope of restructuring and upgrading Hong Kong's economy through innovation and technology.
The Budget proposes to allocate $10 billion to support the establishment of two research clusters, so as to attract the world's top scientific research institutions and technology enterprises to Hong Kong. The general direction is correct, but high land price and high housing price inevitably will weaken Hong Kong's competitiveness. Some years ago, a big US high-tech company shelved its investment plan to set up a data centre in Hong Kong, citing the reason of high cost for business operation. From this, one can get a rough idea how the problem of land shortage restricts Hong Kong's economic development.
Before the Task Force on Land Supply submits its formal report on cultivating new land sites for development in a large scale, the government should be flexible and adaptable to work out some short-term measures to ease the current shortage of land supply.
One is to simplify the procedure to consider and approve applications for rezoning farmland for residential development and speed up negotiations on regrant premium, so as to release more private land sites for residential development.
Another is to increase the densities of existing residential development projects. Plot ratio for urban residential development should be increased to make best use of land.
The problem of land shortage for development in Hong Kong becomes increasingly serious. Only through large-scale reclamation can hundreds of hectares of land for development be provided to meet demand for social and economic development. Taking for example the 10-year housing programme, it projects to build 280,000 public housing units, but there is shortage of land for development and efforts must be devoted to find more land. Moreover, to deal with population aging, some 10,000 hospital beds will have to be added in next 15 to 20 years. There is urgent demand of land sites for expanding hospitals or building new hospitals.
Given that the Treasury is flooded with money, the government has greater financial strength to undertake large-scale reclamation to cure once and for all the chronic disease of land shortage.
02 March 2018
