Comment on the pros and cons of privatization of social welfare services in Hong Kong society. Use the “LINK-REIT” as an example to illustrate your answer.

4288 Words Mar 16th, 2012 18 Pages
TOPIC 6: COMMENT ON THE PROS AND CONS OF PRIVATIZATION OF SOCIAL WELFARE SERVICES IN HONG KONG SOCIETY. USE THE "LINK-REIT" AS AN EXAMPLE TO ILLUSTRATE YOUR ANSWER.

INTRODUCTION

The Link-Reit (Real Estate Investment Trust) has long been a controversial issue ever since its launch. The issue in fact concerns the privatization of welfare services. The purpose of this paper is to review the worthiness of privatization in the midst of conflicts of interests among different groups of people in Hong Kong. For a start, the definition of privatization of welfare services will be stated. Then, there would be a brief summary on the privatization development in Hong Kong. As this paper will focus on discussing privatization by using the Link-Reit
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It provided for an interest-free loan to assist eligible households to meet the down-payment on a small to medium-sized domestic flat in the private sector (La Grange, 1997, p. 75-76). Sale of Flats to Sitting Tenants Scheme (SFSTS) was introduced in 1991. The proposal states that about five-year-old flats were to be considered for sale to overcome the two major barriers to home ownership: the high price of private sector dwellings and the limited stock of HOS/PSPS flats relative to demand (La Grange, 1997, p. 77). Tenants Purchase Scheme (TPS) was another scheme announced in December 1997, offering tenants an opportunity to buy their units at deeply discounted prices, reduced public housing tenants' bids for private homes. However, this adversely affected home transactions. Moreover, the Housing Department started to contract out estate maintenance management services to Property Management Agents in private sector from 1987.

All these schemes have successfully encouraged private sectors to participate in housing except SFSTS which was proved to be a failure under such a harsh requirement and merely 3000-4000 five year old flats were sold under the scheme in first year operation (La Grange, 1998, p. 512).

BACKGROUND OF LINK-REIT

The Link-Reit is managed by the Link Management Limited and