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CHIEF EXECUTIVE CARRIE LAM'S POLICY ADDRESS HIGHLIGHTS
The Chief Executive Mrs Carrie Lam revealed details of her maiden Policy Address themed “We Connect for Hope and Happiness” at the Legislative Council last week (October 11, 2017).
"In the last two decades, thanks to the support of the Mainland China and with an international vision, Hong Kong has kept its distinct features and strengths. 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," she said.
A number of initiatives will be of interest to the business and international communities and are summarised below.
- Support SMEs by reducing profits tax to 8.25% for first $2 million (US$255,000) profits. Remaining profits to be taxed at current rate of 16.5%;
- Encourage R&D investment with 300% tax deduction for first $2 million R&D expenditure, and 200% deduction for remainder;
- Increase CDTAs to 50 within the next few years;
- Sign and FTA and IPPA with ASEAN in November; and sign a CEPA with Macao this year;
- Open an Economic and Trade Office in Thailand - the third ETO in ASEAN;
- Demolish and redevelop the three government towers in Wan Chai to create a new, integrated wing for the HKCEC with 23,000 square metres of convention and exhibition facilities;
- Boost diversified development of tourism sector, including cultural, heritage, green and creative tourism;
- Issue "green bonds" to encourage investment in green projects via HK capital markets;
- HKMA will launch a Faster Payment System in 2018 to promote more diversified and flexible payment products.
Innovation and Technology
- Set aside at least $10 billion in university research funding to further encourage private companies to increase R&D spend;
- Kick-start a $500 million "Technology Talent Scheme" to train and pool technology talent;
- Inject $3 billion into the Research Endowment Fund;
- Use $2 billion of the Innovation and Technology Venture Fund Scheme to co-invest on matching basis with VC funds investing in local tech startups;
- Invest $700 million to take forward Smart City initiatives, including "smart lampposts"; and develop an intelligent transport system (parking meters, payments, real-time parking information).
- Inject $1 billion into the CreateSmart initiative to boost support for design and creative industries.
- Propose a way forward to abolish the offsetting mechanism for MPF contributions;
- Increase paternity leave from 3 to 5 days; and study enhancing maternity leave for working women.
- Set up a $12 billion Hostel Development Fund to provide unit cost subsidy for university hostels.
Arts, Sports, Culture
- Increase resources for local artists and groups to perform outside Hong Kong.
- Establish a Countryside Conservation Office and earmark $1 billion to implement revitalisation and conservation efforts;
- The Policy Address also contains a number of new initiatives on land and housing supply, healthcare, care for the elderly and underprivileged, improving livelihood, and youth development.
Full details can be found at: www.policyaddress.gov.hk/2017/eng/index.html