The Housing Authority should encourage better-off households whose income exceeds the income limit to move out of public rental housing so that the vacated units could be allocated to families in need, Director of Housing Leung Chin-man says.

Addressing the Housing Authority Open Regular Meeting today, Mr Leung said that the authority should actively review the Housing Subsidy Policy to ensure that decent accommodation would be provided to the needy people while those who could look after themselves would be taken off the safety net of public subsidies as soon as possible.

"Only in this way can we enhance the operation of the revolving door of public rental housing for the better use of public funds and ensure that our society will develop in an equitable manner on the basis of mutual help and support," he said.

To enable better and more effective use of its valuable resources, Mr Leung said the authority will follow through the concept of 'functionality and cost-effectiveness' as well as simplicity in the public housing design.

He said the authority has succeeded initially in bringing down construction costs by 12%.

"We will continue to study the development density of public housing so that we can improve the living environment and enhance cost-effectiveness while meeting the approved plot ratio. I hope we can continue to look for opportunities to make savings in these areas of work," he added.

Authority to focus on public rental housing

Mr Leung said that authority had implemented measures to meet the needs of the overall development, to explore new sources of revenue and cut spending, and to concentrate the resources on its major function of providing public rental housing. 

Major measures include:

* enhancing the cost-effectiveness in the use of financial resources;

* streamlining the department's structure to enhance service quality;

* divesting the authority's retail and car-parking facilities under the basic principle of withdrawing from the market as far as possible; and

* improving the living environment of public housing estates.

Cash balance sees sharp drop

Mr Leung noted that the authority had a cash balance of $17.3 billion at the end of March, a drop of $10.3 billion compared with the corresponding period last year.

It is estimated that the situation will continue to deteriorate, he added. 

"Our financial strategy is therefore to cut costs and raise revenue actively. In order to support our business operation and public rental housing production, we have to optimise the use of our limited resources," he said.

"We will need to implement financial-management reform and improve the budgetary process to enhance cost-effectiveness."

Housing Department to be downsized

Mr Leung said the authority will continue with its efforts to streamline the Housing Department by downsizing wherever possible with a view to enhancing the efficiency and to motivating our staff so that the good quality of services provided to the public will not be compromised.

He said divesting the authority's retail and car-parking facilities in the form of a Real Estate Investment Trust will not only introduce a new investment product to the local financial market, but also broaden public participation in the property market.

"In advocating a healthy property market, we have made a historic step forward," Mr Leung said.

REIT expands financial market offerings

He said a new company responsible for managing the REIT has been set up, adding that the Housing Department, global coordinators, financial adviser and other consultants, as well as the new management company are working hard to formulate the transitional plan and make listing arrangements for the project's successful implementation.

Housing matters, no matter big or small, can affect our living quality, he said.

"So we must work towards our target of providing speedy responses to complaints. On the other hand, enhancing residents' awareness in protecting the living environment will be an important element in our work. Not until all residents care about their own community can we hope to nourish a quality living culture," Mr Leung said.