Hong Kong Chief Executive Carrie Lam delivers her policy speech at the Legislative Council in Hong Kong, China, on October 11, 2017. (Photo/CGTN)
Housing will be “the priority” for Carrie Lam’s Hong Kong SAR administration, the new chief executive announced on Wednesday morning in her maiden Policy Address.
Lam told the Legislative Council that her vision for Hong Kong was “of hope and happiness” and called for a “united, harmonious and caring” society to realize the SAR’s ambitions.
“As long as we can achieve consensus, and capitalize on our strengths, the best of Hong Kong is yet to come!,” she declared.
In a break with tradition, the chief executive outlined her major initiatives in an abridged version of the address to the Legislative Council. Here are the highlights:
Housing shortages and sky high prices are a persistent complaint of Hong Kong residents, and Lam said meeting the public’s housing needs were the “top priority” and pledged to “think outside the box” to address shortages. However, she warned that there was no “magic wand” to fix the problem.
She announced plans to shorten the waiting times for public housing and help better-off tenants move up the housing ladder, and suggested she would expand the Green Form Subsidised Home Ownership Scheme (GSH). She said GSH “has its merits and no shortcomings.”
Construction of Home Ownership Scheme flats and subsidies for lower-income families are set to continue. However, she said the proposed “Starter Homes” units for first-time buyers will only be built on the premise that the existing supply of public housing will not be affected.
One Country, Two Systems
Lam said the One Country, Two Systems principle worked for Hong Kong and all citizens were responsible for its implementation. She stressed that any attempt to overturn the system must be rejected, and warned against any act that could harm the SAR’s security.
“In the last two decades, thanks to the support of the Motherland and with an international vision, Hong Kong has kept its distinct features and strengths,” she said.
“This fully demonstrates that 'One Country, Two Systems' is the best institutional arrangement to ensure Hong Kong’s long-term prosperity and stability after our return to the Motherland. It is a workable solution and an achievable goal welcomed by the people.”
Lam said the Hong Kong economy was performing well, having grown by 4 percent in real terms in the first two quarters year-on-year. She said that growth in 2017 should exceed the forecast of 3.5 percent, but a diversified economy was essential to maintain the SAR’s momentum.
Lam announced that the government has a fiscal reserve in excess of 1,000 billion HK dollars (128 billion US dollars), and said fiscal surpluses will be used “wisely to benefit the community.”
Commuters who spend at least 400 HK dollars on public transport will be given a monthly travel subsidy of up to 300 HK dollars, paid out of operating company MTR Corporation’s dividends. The scheme to ease costs on low-income workers was proposed by Lam during her election campaign.
“Our proposal is to set the line at 400 HK dollars in the monthly expenditure on public transport, with the Government providing a subsidy amounting to 25 percent of the actual expenses in excess of this level, subject to a cap of 300 HK dollars a month.”
Business tax breaks
A lower tax rate on the profits of businesses was announced in a bid to ease the burden on local operators and encourage entrepreneurship.
The tax rate on the first 2 million HK dollars of profit will be halved from the existing 16.5 percent to 8.25 percent (Lam pledged to reduce the rate to 10 percent in her campaign manifesto). Profits above 2 million HK dollars will be taxed at 16.5 percent.
She also proposed that the first 2 million HK dollars in eligible R&D expenditure will enjoy a 300-percent tax deduction with the remainder at 200 percent.
Lam said Hong Kong’s ageing population was not a threat to the public finances, but acknowledged that the “challenges faced by public hospitals will be huge.”
She promised to devise a variety of new services for the elderly and announced that a blueprint for the development and delivery of primary healthcare services was being drawn up. She also pledged to reduce waiting times to zero for appropriate home and community care services for the elderly in need of support, including those discharged from hospital.
Education and youth
Lam announced new funding for special education, and said her campaign commitment to increase recurrent education spending to 5 billion HK dollars would be partly targeted at new initiatives under consideration.
She also announced that more young people will be appointed to government committee, “with the aim of increasing the overall ratio of youth members to 15 percent within the current-term Government.”
Smart Hong Kong
Lam pledged to invest 700 million HK dollars to immediately take forward several projects to develop Hong Kong into a Smart City.
She also announced plans to build a new convention and exhibition venue of international standard in the proximity of the existing Hong Kong Convention and Exhibition Centre, abandoning the previous government’s plans to build at the Wan Chai Sports Ground.
Research and development
Lam signaled that she would invest more in scientific research, with a particular eye on breakthroughs that would help Hong Kong remain a top destination for global financial institutions.
She said 1.5 percent of gross domestic product will be spent on research and development, up from the current 0.7 percent. Ten billion HK dollars will be set aside for university research funding.