LEGISLATIVE COUNCIL ― 21 November 2018 2747 OFFICIAL RECORD OF PROCEEDINGS Wednesday, 21 November 2018 The Council met at Eleven o'clock MEMBERS PRESENT: THE PRESIDENT THE HONOURABLE ANDREW LEUNG KWAN-YUEN, G.B.S., J.P. THE HONOURABLE LEUNG YIU-CHUNG THE HONOURABLE ABRAHAM SHEK LAI-HIM, G.B.S., J.P. THE HONOURABLE TOMMY CHEUNG YU-YAN, G.B.S., J.P. PROF THE HONOURABLE JOSEPH LEE KOK-LONG, S.B.S., J.P. THE HONOURABLE JEFFREY LAM KIN-FUNG, G.B.S., J.P. THE HONOURABLE WONG TING-KWONG, G.B.S., J.P. THE HONOURABLE STARRY LEE WAI-KING, S.B.S., J.P. THE HONOURABLE CHAN HAK-KAN, B.B.S., J.P. THE HONOURABLE CHAN KIN-POR, G.B.S., J.P. DR THE HONOURABLE PRISCILLA LEUNG MEI-FUN, S.B.S., J.P. THE HONOURABLE WONG KWOK-KIN, S.B.S., J.P. THE HONOURABLE MRS REGINA IP LAU SUK-YEE, G.B.S., J.P. 2748 LEGISLATIVE COUNCIL ― 21 November 2018 THE HONOURABLE PAUL TSE WAI-CHUN, J.P. THE HONOURABLE CLAUDIA MO THE HONOURABLE MICHAEL TIEN PUK-SUN, B.B.S., J.P. THE HONOURABLE STEVEN HO CHUN-YIN, B.B.S. THE HONOURABLE FRANKIE YICK CHI-MING, S.B.S., J.P. THE HONOURABLE WU CHI-WAI, M.H. THE HONOURABLE YIU SI-WING, B.B.S. THE HONOURABLE MA FUNG-KWOK, S.B.S., J.P. THE HONOURABLE CHARLES PETER MOK, J.P. THE HONOURABLE CHAN CHI-CHUEN THE HONOURABLE CHAN HAN-PAN, B.B.S., J.P. THE HONOURABLE LEUNG CHE-CHEUNG, S.B.S., M.H., J.P. THE HONOURABLE KENNETH LEUNG THE HONOURABLE ALICE MAK MEI-KUEN, B.B.S., J.P. DR THE HONOURABLE KWOK KA-KI THE HONOURABLE KWOK WAI-KEUNG, J.P. THE HONOURABLE DENNIS KWOK WING-HANG THE HONOURABLE CHRISTOPHER CHEUNG WAH-FUNG, S.B.S., J.P. DR THE HONOURABLE FERNANDO CHEUNG CHIU-HUNG LEGISLATIVE COUNCIL ― 21 November 2018 2749 DR THE HONOURABLE HELENA WONG PIK-WAN THE HONOURABLE IP KIN-YUEN DR THE HONOURABLE ELIZABETH QUAT, B.B.S., J.P. THE HONOURABLE MARTIN LIAO CHEUNG-KONG, S.B.S., J.P. THE HONOURABLE POON SIU-PING, B.B.S., M.H. DR THE HONOURABLE CHIANG LAI-WAN, S.B.S., J.P. IR DR THE HONOURABLE LO WAI-KWOK, S.B.S., M.H., J.P. THE HONOURABLE CHUNG KWOK-PAN THE HONOURABLE ALVIN YEUNG THE HONOURABLE ANDREW WAN SIU-KIN THE HONOURABLE CHU HOI-DICK THE HONOURABLE JIMMY NG WING-KA, J.P. DR THE HONOURABLE JUNIUS HO KWAN-YIU, J.P. THE HONOURABLE HO KAI-MING THE HONOURABLE LAM CHEUK-TING THE HONOURABLE HOLDEN CHOW HO-DING THE HONOURABLE SHIU KA-FAI THE HONOURABLE SHIU KA-CHUN THE HONOURABLE WILSON OR CHONG-SHING, M.H. 2750 LEGISLATIVE COUNCIL ― 21 November 2018 THE HONOURABLE YUNG HOI-YAN DR THE HONOURABLE PIERRE CHAN THE HONOURABLE CHAN CHUN-YING, J.P. THE HONOURABLE TANYA CHAN THE HONOURABLE CHEUNG KWOK-KWAN, J.P. THE HONOURABLE HUI CHI-FUNG THE HONOURABLE LUK CHUNG-HUNG, J.P. THE HONOURABLE LAU KWOK-FAN, M.H. THE HONOURABLE KENNETH LAU IP-KEUNG, B.B.S., M.H., J.P. DR THE HONOURABLE CHENG CHUNG-TAI THE HONOURABLE KWONG CHUN-YU THE HONOURABLE JEREMY TAM MAN-HO THE HONOURABLE GARY FAN KWOK-WAI THE HONOURABLE AU NOK-HIN THE HONOURABLE VINCENT CHENG WING-SHUN, M.H. THE HONOURABLE TONY TSE WAI-CHUEN, B.B.S. MEMBER ABSENT: THE HONOURABLE JAMES TO KUN-SUN LEGISLATIVE COUNCIL ― 21 November 2018 2751 PUBLIC OFFICERS ATTENDING: THE HONOURABLE MATTHEW CHEUNG KIN-CHUNG, G.B.M., G.B.S., J.P. CHIEF SECRETARY FOR ADMINISTRATION MR SONNY AU CHI-KWONG, P.D.S.M., J.P. UNDER SECRETARY FOR SECURITY, AND SECRETARY FOR SECURITY THE HONOURABLE FRANK CHAN FAN, J.P. SECRETARY FOR TRANSPORT AND HOUSING THE HONOURABLE EDWARD YAU TANG-WAH, G.B.S., J.P. SECRETARY FOR COMMERCE AND ECONOMIC DEVELOPMENT THE HONOURABLE PATRICK NIP TAK-KUEN, J.P. SECRETARY FOR CONSTITUTIONAL AND MAINLAND AFFAIRS CLERKS IN ATTENDANCE: MR KENNETH CHEN WEI-ON, S.B.S., SECRETARY GENERAL MISS ODELIA LEUNG HING-YEE, DEPUTY SECRETARY GENERAL MS DORA WAI, ASSISTANT SECRETARY GENERAL MR MATTHEW LOO, ASSISTANT SECRETARY GENERAL 2752 LEGISLATIVE COUNCIL ― 21 November 2018 PRESIDENT (in Cantonese): Will the Clerk please ring the bell to summon Members to the Chamber. (After the summoning bell had been rung, a number of Members entered the Chamber) TABLING OF PAPERS The following papers were laid on the table under Rule 21(2) of the Rules of Procedure: Subsidiary Legislation/Instruments L.N. No. Mines (Safety) (Amendment) (No.2) Regulation 2018 ..... 217/2018 Dangerous Goods (General) (Amendment) (No.2) Regulation 2018 ........................................................................ 218/2018 Dangerous Goods (Government Explosives Depots) (Amendment) (No.2) Regulation 2018 .................. 219/2018 Banking (Amendment) Ordinance 2018 (Commencement) (No.2) Notice 2018 ................................................ 220/2018 Banking (Exposure Limits) Rules ...................................... 221/2018 Banking (Capital) (Amendment) Rules 2018 .................... 222/2018 Banking (Disclosure) (Amendment) (No.2) Rules 2018 ... 223/2018 Antiquities and Monuments (Declaration of Monuments and Historical Buildings) (Consolidation) (Amendment) Notice 2018 ............................................................ 224/2018 LEGISLATIVE COUNCIL ― 21 November 2018 2753 Other Papers No. 27 ― Fire Services Department Welfare Fund Report on the Administration of the Fund, Financial statements and Report of the Director of Audit for the year ended 31 March 2018 No. 28 ― Prisoners' Education Trust Fund Report by the Trustee, Financial statements and Report of the Director of Audit for the period from 1 April 2017 to 31 March 2018 No. 29 ― Secretary for Home Affairs Incorporated Financial statements and Report of the Director of Audit for the year ended 31 March 2018 No. 30 ― Sir Edward Youde Memorial Fund Report of the Board of Trustees, Financial statements and Report of the Director of Audit for the Period 1 April 2017 to 31 March 2018 No. 31 ― Director of Social Welfare Incorporated Financial statements and Report of the Director of Audit for the year ended 31 March 2018 No. 32 ― Immigration Service Welfare Fund Report on the administration of the Fund, Financial statements and Report of the Director of Audit for the year ended 31 March 2018 Report No. 4/18-19 of the House Committee on Consideration of Subsidiary Legislation and Other Instruments ORAL ANSWERS TO QUESTIONS PRESIDENT (in Cantonese): Questions. First question. 2754 LEGISLATIVE COUNCIL ― 21 November 2018 Adjustment of the demand-side management measures for the property market 1. MR JEFFREY LAM (in Cantonese): President, some members of the public have relayed that with the interest rates rising gradually and the Sino-United States trade conflicts intensifying, the local property market may have entered a downward cycle in recent months, and the various demand-side management measures (commonly known as "harsh measures") implemented by the Government to address the overheated property market have become outdated. In this connection, will the Government inform this Council: (1) whether it will examine relaxing the loan-to-value ratios for mortgage loans to make it easier for members of the public to acquire their first property or replace their existing property, and enable small and medium enterprises to get more operating capital through securing loans by collateralizing their properties; (2) whether it has assessed if the harsh measures will exacerbate the fall in property prices when the property market is in a downtrend; if it has assessed, whether it can submit the relevant report to this Council; and (3) given that a Hong Kong permanent resident who disposes of his or her only original residential property within 12 months from the date of acquisition of a new residential property may apply for a partial refund of the ad valorem stamp duty payable at the time of acquisition of the property which is equivalent to 15% of the property price, whether the Government will change such a taxation arrangement so that persons who acquire a new residential property as replacement are required to pay additional stamp duty only if they fail to dispose of their original residential property within 12 months, so as to alleviate their burden when acquiring properties; if so, of the details; if not, the reasons for that? SECRETARY FOR TRANSPORT AND HOUSING (in Cantonese): President, maintaining the steady development of the private residential property market is one of the important objectives of the Government's housing policies. In the past few years, due to tight housing demand-supply balance and the LEGISLATIVE COUNCIL ― 21 November 2018 2755 continued ultra-low interest rates environment, local property prices have been on the rise, with heightened risk of a bubble. The Government has adopted a two-pronged approach by striving to increase land and housing supply to meet demand, and introducing several rounds of demand-side management measures as and when necessary to suppress external demand, short-term speculative demand and investment demand, with a view to stabilizing the property market and preventing adverse consequences arising from an exuberant market. The Hong Kong Monetary Authority ("HKMA") has also introduced several rounds of counter-cyclical macro-prudential measures to strengthen risk management of banks and resilience of the banking sector to cope with any possible impact in the event of a fall in property prices. Having consulted the Financial Services and the Treasury Bureau, the Inland Revenue Department ("IRD") and HKMA, I set out my consolidated reply to various parts of the question raised by Mr Jeffrey LAM as follows: (1) The intent of HKMA's counter-cyclical macro-prudential measures is to ensure stability of the banking system through implementation of appropriate measures according to the development of the property cycle, taking into consideration key factors such as the trend of property prices, property transaction volume, economic fundamentals and the external environment.