Not one but two items on the op-ed page in today’s South China Morning Post urge action on property prices.
As an Executive Council member, vaguely pro-democratic academic Anthony Cheung cannot publicly oppose existing policy, but suggests that the government could ease the problem by increasing land sales for non-luxury developments and barring mainlanders from buying up precious space and leaving it unused. He also raises the possibility of reviving the old Home Ownership Scheme, which provided affordable, semi-nice apartments for the non-poor non-rich by cutting developers out of the loop.
Ex-civil servant Mike Rowse puts the issue in the context of Chief Executive Donald Tsang’s last-but-one policy address in October: will Sir Bow-Tie fizzle out as a lame duck or do something bold, in which case what better target than the property mess? Rowse doubts the feasibility of keeping mainlanders out of the market and essentially recommends more land sales. But, he adds, in such a fine-tuned way as to avoid reducing existing property owners’ unrealized gains – a surely impossible condition if the idea is to make homes more affordable.
The problem is that policymakers (many of them owners of investment real estate) cannot bring themselves to announce that prices are too high and young couples and other end-users should wait. (Donald, as Financial Secretary, did say as much around early 1997, prompting roars of outrage when prices continued climbing for several months before he was proved right.)
Rowse opposes resurrecting the HOS on the grounds that: “…direct intervention by the government in any market is really an admission of policy failure.” Even assuming that ultimate government ownership of all the land is not direct intervention in the first place, this is absurd. To the serving or former bureaucrat’s mind, it seems, avoiding a face-losing admission that policy has failed – which it clearly has – is more important than fixing the resulting problem.
With the Philippine bus massacre slipping off the front pages, property is resuming its rightful place as the all-consuming Default Big Issue of mid-2010. The never-ending debate on the subject at AsiaXpat has become the on-line equivalent of that ant colony in Europe that now covers much of Spain, France and Italy. The SCMP articles are part of the much broader discussion ahead of the policy address.
This is the time of year when politicians and interest groups clamour to provide input, preferably to Donald in person, ahead of the big annual speech. Yet this is a face-giving, symbolic ritual about as nonsensical as Hong Kong’s supposed inclusion in China’s latest Five-Year Plan. Donald doesn’t do listening. (Actually, faced with stuff like the British Chamber’s dense, single-spaced, committee-drafted, turgid blathering about Four Pillar Industries and RMB business, who can blame him?)
We do know, however, that the Chief Executive might listen, in a roundabout way, to the tycoon-funded think-tank the Bauhinia Foundation, not least because the people running it are good buddies, and can be relied upon to tell him what he is thinking anyway – and bear in mind that there might be times when he could use a helpful reminder. And with unfortunate timing, just before Rolando Mendoza opened fire with his M-16, the Foundation announced a proposal for what might be called an HOS with quasi-Singaporean characteristics.
They put forward several ideas to give middle-class, first-time buyers a leg up: minimal down-payments, straight HOS-style supply of cheap units, release of cash from buyers’ Mandatory Provident Fund accounts and/or the buying of a 50% stake in a property while paying a government agency rent for the rest. Will Donald go for all or some of it? Possibly, in limited amounts; ideally over such a timescale that the cycle turns, a crash takes place and the whole thing can be shelved before it even gets off the ground. It is bred into his bureaucratic body and mind to want to go down as the hero who never let the Civil Service down by admitting policy failure. A lame duck, in this culture, is a success.
By the standards of usual Bauhinia Foundation policy documents (think BritCham on Powerpoint) this is thought-provoking, lateral-thinking stuff. Of course it is just a Band-Aid designed to maintain the high-land-price system and the flow of wealth it guarantees the property giants who finance the Bauhinia Foundation. But it’s good to see our local vested interests devising thought-provoking and lateral-thinking ways to carry on screwing us. It makes a change.