A work group on long-term fiscal planning has proposed a draw-down from the HK$220 billion Land Fund to make up the endowment for the so-called future fund that is being set up by the Hong Kong government to cope with potential structural deficits in the future.
The panel has also recommended a top-up amounting to 25 to 33 percent of the yearly fiscal surplus for the new fund, the Hong Kong Economic Journal reported Tuesday.
In related proposals, the government-backed work group has suggested that the government should sell idle housing units and land plots meant for senior civil servants, as well as dispose investments in government business enterprises, during times of serious distress.
Government business enterprises hold strategic assets such as railways and the airport.
Proposed asset disposals could provide about HK$348.3 billion of revenue in total, according to the panel.
The Future Fund, which could be set up by the end of this year, should be placed along with the Exchange Fund, which is managed by the Hong Kong Monetary Authority, it said.
At least half of the Future Fund should be invested in private equities and real estate, a portfolio of higher risk for longer-term growth, with the rest in stocks, bonds, and other long-term investment.
Also, there should be at least a 10-year lock-up period before withdrawals can be made, to allow more time in order to reap better returns, the report said, citing Elizabeth Tse, chairperson of the work group and Permanent Secretary for Financial Services and the Treasury.
Translation by Vey Wong
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