Chief Executive Carrie Lam will unveil her new scheme for first-time homebuyers who do not qualify for subsidized housing but cannot afford private apartments during her first policy address next month. Questions to ponder:
- How does the government prioritize the needs of the various segments of society? Are the woes of families below poverty line less urgent than those who cannot afford private apartments? How about those who need to wait long hours for treatment in public hospital emergency rooms, or those who need to wait years to get an operation? What about the needs of the long queue of senior citizens waiting for a place in a retirement home? …
- What priority scheme is being used by the goverment? How should the resources be best allocated to maximize the satisfaction of the whole society? How can the Chief Executive compare the costs to be expended and the gains to be earned for various projects?
- I don’t think the government has the information to do the economic calculation to ensure that public fund is well spent to maximize the overall well being of our society.
- Without economic calculation, what means does the government have in making a rational choice between the various alternatives? Inevitably, the government will have to resort to political calculation to prioritize the divergent interests of various stakeholders. Not surprisingly, the needs of the most vocal, the issue that gets the most media attention or the choice that will help the politician win the most votes will be the first addressed.
- Politics is dishonest. It is mostly claptrap and folderol.
- Government is the most inefficient organization in the world. Putting the government responsible for solving housing problems would inevitably lead to wastage and sub-optimal allocation of resources. You will remember the 1998 property market collapse followed by the then Chief Executive Tung Chee-hwa to scrap his plan to build 85,000 public housing units.
- The solution to skyrocketing price is skyrocketing price. When price is high and profit margin is attractive, property developers are encouraged to construct and sell more apartments, thereby increasing the supply and bringing down the price until it is no longer profitable to do so.
- Trees never grow to the sky. Property prices cannot defy gravity forever. Left to itself, free market forces will do the natural correction in due course.
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