Today, in her inaugural Policy Address as Chief Executive, Ms Carrie Lam outlined her future vision for the city, with particular emphasis on innovation & technology, Smart Cities and taxation reform.
Our extended highlights can be found below:
Finance and Economy
- The Government currently has a fiscal reserve in excess of $1,000 billion.
- Economy has been expanding by 4.0% in real terms year-on-year in the first two quarters.
- Unemployment rate dropping to 3.1% in recent months.
- Overall economic growth this year is expected to go higher than 3.5%.
Innovation & Technology / Research & Development
- Boost the development of emerging industries in addition to traditional industries; both innovation and technology (I&T) and the creative industries have a competitive edge and much potential.
- For Hong Kong to catch up in the I&T race and to become an international I&T hub, the Government will step up efforts in eight key areas, resources for research and development (R&D), nurturing a talent pool, venture capital, scientific research infrastructure, legislation review, opening up data, government procurement and popular science education, to propel I&T development.
- Goal to double the Gross Domestic Expenditure on R&D as a percentage of the Gross Domestic Product from the current 0.73% to 1.5% within the current-term Government’s five-year tenure.
- $10 billion for university research funding, and additional tax deduction for R&D expenditure incurred by enterprises.
- The Education Bureau will make available $3 billion to provide studentships for local students admitted to University Grants Committee-funded research postgraduate programmes.
- The Innovation and Technology Bureau will launch a $500 million “Technology Talent Scheme”, including the establishment of a “Postdoctoral Hub”.
- $700 million investment to immediately take forward several projects to develop Hong Kong into a Smart City.
- To press ahead with I&T development at full steam, the Chief Executive will personally lead a high-level, inter-departmental Steering Committee on Innovation and Technology to examine and steer measures under the eight areas of I&T development as well as Smart City projects.
- Proposal to inject $1 billion into the CreateSmart Initiative, and providing more resources to the Hong Kong Design Centre.
- The Commerce and Economic Development Bureau will identify more room for development through integrating design and industry. It will also foster closer links between Hong Kong’s design industry and Shenzhen and other design cities in the Mainland and overseas.
- The Government will allocate more resources to the Financial Services Development Council to enhance its role in promoting market development and nurturing talent.
- Issuing of a ‘green bond’ in the next financial year and promote the establishment of green bond certification schemes.
- Two-tier profits tax system: the profits tax rate for the first $2 million of profits of enterprises will be lowered to 8.25%, or half of the standard profits tax rate. Profits above that amount will continue to be subject to the standard tax rate of 16.5%.
- To ensure that the tax benefits will target small and medium enterprises, restrictions will be made to ensure that each group of enterprises may only nominate one enterprise to benefit from the lower tax rate.
- To encourage R&D investment by enterprises, the first $2 million eligible R&D expenditure will enjoy a 300% tax deduction with the remainder at 200%.
- Augment the civil service establishment by at least 3% in the next financial year to provide immediate relief to the workload pressure.
- Revamp the Central Policy Unit into the “Policy Innovation and Co-ordination Unit” and place the Efficiency Unit under the Innovation and Technology Bureau.
- Proposal to introduce a non-means tested Public Transport Fare Subsidy Scheme to provide fare subsidy, for commuters if their monthly public transport expenses exceed $400 in the monthly expenditure on public transport, with the Government providing a subsidy amounting to 25% of the actual expenses in excess of this level, subject to a cap of $300 a month.
- The scheme is estimated to affect 2 million people and will cover the fares of MTR, franchised buses, green minibuses, ferries and trams.
- Focusing on supply and based on the Long Term Housing Strategy, the government will step up its effort in increasing the supply of housing units
- Substantially increase the supply of units under the Green Form Subsidised Home Ownership Scheme (GSH), which specifically caters for Public Rental Housing (PRH) tenants.
- After a preliminary technical assessment, the Housing Department considers that some 4 000 new PRH units in Fo Tan, Sha Tin can be converted into GSH units for sale in late 2018.
- Affordable “Starter Homes” for middle-class families in Hong Kong, thus re-igniting the hopes of families with a higher income to own a home in the face of hiking private property prices only on the premise that the existing supply of public housing will not be affected.
- Land supply for “Starter Homes” will have to come from sites already owned by private developers or to be bought from the Government.
- Criteria for “Starter Homes” buyers, among other things: HK residents who have lived in HK for seven years or more and have never owned property here; the upper income limit for the new scheme will be set at not exceeding $34,000 a month for singletons and $68,000 for households with two or more members.
- To increase land supply:
- optimising the use of idle government premises by providing rental housing units like those under the “Light Housing” project launched by Light Be in Sham Tseng;
- facilitating the Hong Kong Housing Society in allowing the owners of its subsidised housing to rent out their flats with premium unpaid to needy families at below market rentals on a pilot basis;
- exploring the wholesale conversion of industrial buildings into transitional housing with waiver of land premium;
- supporting non-profit-making organisations to explore the feasibility of constructing pre-fabricated modular housing on idle sites.
Convention and Exhibition Industry
- Build a new convention and exhibition venue of international standard in the proximity of the existing Hong Kong Convention and Exhibition Centre (HKCEC) in Wan Chai.
- Wan Chai Sports Ground conversion idea scrapped.
- Instead, the plan is to demolish and redevelop the three government buildings next to the HKCEC in Wan Chai North into a new wing that can be connected to and integrated with the existing HKCEC, adding about 23 000 square metres of connected convention and exhibition facilities.
- continue development of a new convention centre above the Exhibition Station of the Shatin to Central Link to provide an additional 15 000 square metres of convention space.
- Development and delivery of primary healthcare services, and the setting up of the first district health centre with a new operation model on a pilot basis in Kwai Tsing District.
Mandatory Provident Fund (MPF)
- “Offsetting” arrangement should be abolished and the Government willing to increase its financial commitment to mitigate the impact of the abolition on enterprises, in particular micro, small and medium enterprises.
- To further safeguard public safety and to assist owners in need, the Government will launch “Operating Building Bright 2.0” at a cost of $3 billion.
- The Government will devote another $2 billion to subsidise old buildings to meet the fire safety requirements under the Fire Safety (Buildings) Ordinance.
- Recurrent Air-conditioning Grant for public schools
- Significantly enhancing the Low-income Working Family Allowance Scheme whereby, for a four-person household with two eligible children, the monthly payment will increase by 23% from the current $2,600 to $3,200 if the monthly household income is $19,000 or below and the total monthly working hours of all household members are not less than 192;
- Proposal to increase the statutory paternity leave from three days to five days
- Commence a study and the related work on extending the duration of the 10-week statutory maternity leave
- Comprehensive review on the entry requirements relating to Chinese proficiency for all grades in the civil service so as to increase government job opportunities for the ethnic minorities;
- Resume the construction of new public markets and improving management and facilities of current public markets.
- Establishing a Countryside Conservation Office to co-ordinate conservation projects in remote countryside areas, not only to protect natural ecology and cultural resources, but also promote eco-tourism.
- Provide subsidies to encourage telecommunications companies to extend the fibre-based network to villages in remote locations.
To download our highlights click here.
The full Policy Address can be found here.