MR CHAN KIN-POR (in Cantonese): First of all, I thank the President for allowing Members to give overall comments on the Budget in this debate session. The Budget serves two main purposes: first, to promote economic development so as to create wealth and employment for society; second, to fairly resolve various livelihood problems by using public revenue. In my opinion, the Financial Secretary and his team have worked very hard to make this year’s Budget serve these two purposes.
The fiscal surplus this year has hit a record high. The Treasury being overflowing with money should be a good thing, but as it turns out, too much money can be troublesome, too. Society has focused entirely on whether cash should be handed out to everyone, causing fierce debates and grievances. As a result, the development planning for Hong Kong economy in the Budget and the huge amount of resources invested in people’s livelihood were given no attention whatsoever.
In fact, Members should have noted that the Government’s recurrent expenditure this year is substantially increased by 11.8% to $406.5 billion, much higher than the increases ranging from 6% to 8% in the past seven years. Under the recurrent expenditure, welfare expenditure is increased by 21% to $79.8 billion; health care expenditure is increased by 13.4% to $71.2 billion; and education expenditure is increased by 5.6% to $84.6 billion. The expenditure of these three major items accounts for 60% of the Government’s total recurrent expenditure.
Out of the $100-odd billion surplus this year, some $80 billion will be spent on social sectors in need. That includes allocating $20 billion for improving cultural facilities; $20 billion for establishing technology research clusters and injecting funds into the Hong Kong Science and Technology Parks Corporation; earmarking $15 billion for MPF offsetting; and injecting $8.5 billion into the Continuing Education Fund. In addition, the Budget has also allocated $52.4 billion to “sharing Fruits of Success”, including a tax rebate, rates concession and offering two additional months of Comprehensive Social Security Assistance payments.
Talking about “giving away candies”, the Budget has been proposing relief measures every year since the financial turmoil in order to relieve people’s hardships. The relief measures have become an annual routine even though the economy has recovered. Some people have questioned why the Government continued to give away candies even when the economy was looking up. During the Budget consultation this year, the calls for a universal cash handout were only a minority. However, since the consultation coincided with the Legislative Council by-election period, “giving away candies” naturally became an election issue and added fuel to the flames. Fortunately, the Government heeded sound advice immediately and proposed the Caring and Sharing Scheme. Although the payment time and administrative costs did raise some concerns, people’s grievances have generally quieted down. Personally, I support offering tax rebate and rates concessions to the middle class who paid the largest amount of tax but enjoy few welfare benefits. I also do not oppose a cash handout, but I do not support a universal cash handout. Cash should be handed out to grass roots or people with low income only. Social resources should focus on helping people in need.
Apart from giving away candies, I think there are good reasons for giving the Budget a high score. I believe there are two major long-term challenges that Hong Kong must solve as soon as possible: first, Hong Kong’s dwindling competitiveness; and second, the impact of the ageing population. In my view, given the huge surplus this year, the Budget did manage to change its long-standing financial management principle of keeping the wealth and make substantial allocations to some areas. The approach is bold and merits support.
Members of the Legislative Council have visited the Bay Area recently to experience first-hand the development potential of neighbouring cities. I believe we all share the same feeling, that Hong Kong’s overall competitiveness is falling behind. The economy of Hong Kong has always relied heavily on the financial and property sectors and their associated traders, while other industries have declined drastically. In this innovation and technology era, innovative technologies are widely used in our daily life and economic activities. Hong Kong will soon lag behind the new era if we do not catch up swiftly.
This year’s Budget invests abundant resources in promoting innovation and technology, including allocating $20 billion to the development of the Hong Kong-Shenzhen Innovation & Technology Park in the Lok Ma Chau Loop; allocating $10 billion to the Innovation and Technology Fund; earmarking $10 billion for supporting two technology research clusters; and allocating $10 billion to the Hong Kong Science and Technology Parks Corporation. The provision totalling $50 billion is the largest since the establishment of the Innovation and Technology Bureau. It is a shame that society has rarely talked about the use of this $50 billion and its impacts on Hong Kong in the past two months. I hope the recipient bodies will make good use of the funding and accomplish achievements for Hong Kong, in particular in the area of finance technology which is essential if we are to entrench Hong Kong’s status as an international financial and commercial centre.
To increase the overall competitiveness of society, education is the primary task. The expenditure on education this year increases by 28% to $113.7 billion. Such a substantial increase is rarely seen in recent years. Out of the estimate, $2 billion is recurrent expenditure; $2.5 billion is allocated for providing a Matching Grant Scheme to universities; $2.5 billion is allocated for the establishment of the Student Activities Support Fund; and $8.5 billion is allocated for the Continuing Education Fund. There are indeed many problems in Hong Kong’s education system. Now that the Government has allocated abundant resources to education, it will be the fault of the Education Bureau if it still cannot do a proper job of this.
Another major challenge is the impact of the ageing population on the health care and welfare systems. Society is ill-prepared for this, particularly in terms of health care system reform which is imperative. This year’s Budget has actively responded to public demand by requesting the Hospital Authority to start planning the second 10-year Hospital Development Plan three years ahead of schedule, addressing the problems in the long term in advance. The implementation of such a massive plan involving a funding of $300 billion will not be possible without the backing of a huge surplus. Moreover, an additional $6 billion is allocated to the Hospital Authority; $940 million is allocated for the regularization of the Colorectal Cancer Screening Pilot Programme; and $500 million is allocated for the development of Chinese medicine. These measures show that the Government is intent on solving health care issues of the utmost concern to the people. However, some problems cannot be tackled with money, in particular the shortage of health care manpower. Even if the training of personnel is now sped up, it may not be sufficient to meet the demand of society. I believe it is time to study in-depth ways to tackle the shortage of health care manpower, including the possibility of importing Hongkongers from overseas or internationally recognized health care professionals to practise medicine in Hong Kong.
The Budget has also invested abundant resources in social welfare. In terms of non-recurrent expenditure, $1 billion is allocated for setting up the Innovation and Technology Fund for Application in Elderly and Rehabilitation Care; and $400 million is allocated for extending the Short-term Food Assistance Service Projects. In terms of recurrent expenditure, $300 million is allocated for increasing the salaries of frontline personnel of the welfare sector; and an additional $160 million is allocated for enhancing the service quality of residential care homes and strengthening the care for elderly persons suffering from dementia, as well as providing visiting doctor services for residential care homes. Upon implementation, these measures will definitely alleviate the pressure exerted by the ageing population on society. Why did I read out the figures? Because I think it was a shame that such important matters were not mentioned by anyone.
Lastly, I would like to raise the concerns of the insurance industry. The insurance industry has been making signification contribution to Hong Kong’s economy. However, our policy is at least 10 years behind Singapore. Many international organizations have chosen to settle in Singapore, while some companies which were originally located in Hong Kong have relocated to Singapore, causing the insurance industry to remain at a sustained standstill. For the purpose of this Budget, the Secretary has invited the Insurance Authority and the industry to examine ways, such as taxation arrangements and other regulatory requirements, to enhance Hong Kong’s competitiveness as an insurance hub. I believe the insurance industry will be rendered more competitive after the completion of the study. Do not worry, Deputy Chairman, I will take only two to three more minutes only.
In addition, the Budget has also accepted the industry views on encouraging people to prepare for their future by means of tax deduction. Tax concession is provided to contributions to eligible deferred annuity products in the market and Mandatory Provident Fund. I believe it will be helpful to Hong Kong people if the Government can tackle the ageing population by make good use of insurance.
The development of the Bay Area will inject new impetus into Hong Kong’s future. The insurance industry also hopes to pursue development in the Area and expects the Government to seek permission from the Central Authorities to allow companies registered in Hong Kong to enjoy national treatment in the Bay Area and lower the entry threshold for setting up wholly owned insurance companies in the Bay Area. Besides, the Hong Kong Federation of Insurers has proposed a “Bay Area medical insurance scheme”. Under the proposal, insurance companies in Hong Kong or in the Bay Area are permitted to market on the Internet eligible and regulated medical and illness insurance among residents in the Bay Area. The scheme can be operated through an electronic platform operated by a credible organization such as the Hong Kong Federation of Insurers so that residents of the Bay Area can choose products suitable to them. An electronic platform is also an effective way to handle cross-border capital flow and the products will be protected by the laws of Hong Kong. The scheme has the advantage of strengthening business interactions in the Bay Area. Meanwhile, residents working in the “1.5-hour living circle” do not need to worry about health care. I believe the proposal is an all-win solution that ties in with national development while benefiting the industry in Hong Kong. Thank you, Deputy Chairman.