MR CHAN KIN-POR (in Cantonese): I believe that, despite having heard a lot of negative criticism of the Budget in these two days, Members can look at the matter from multiple angles and listen to my speech. In fact, the Budget has many bright spots.
However, I wish to first respond to a Member’s earlier remarks on Lantau Tomorrow, such as “money has not been spent worthily, but is dumped into the sea instead”. I really take great exception to his remarks of that sort. As we all know, after I made this comment on the radio, a motion of no confidence was moved against me, but I have no regrets at all because I surely have the right to speak in the capacity of a Member. When presiding over a meeting, I certainly abide by the rules, so worries are uncalled-for, not to mention that many people are monitoring the process. Moreover, the Finance Committee Chairman can neither express his views on the subject matter nor cast any vote whatsoever at a committee meeting, so there is no reason at all not to let the Chairman speak. This is truly a fundamental matter of right and wrong. Having said that, Deputy Chairman, this is not the key point of my speech today.
I am speaking in support of the Appropriation Bill 2019. Why do I support it? Apart from some negative comments made by many Members, I would like to talk about the following two points. First, there should be continuity in the improvement of municipal facilities, and priority should be given to people’s pressing needs. This year’s Budget will spend $600 million, compared to $2 billion last year, on the renovation of markets. In addition, the Government will allocate $6 billion to refurbish more than 200 public toilets in five years. It will also extend the length of the harbourfront promenades in about 10 years, and provide more open space on both sides of the Victoria Harbour, thus enabling the public to enjoy life and the scenery along the promenades. When our future generations enjoy the promenades, they will remember that, back in 2019, the current-term Legislative Council has contributed to the planning for the next decade. With this crystal clear line of thought, I hope that the Financial Secretary (“FS”) continues along this direction to consistently put resources into improving municipal design for people’s better life.
The funding for health care also reflects the Government’s understanding of the pinches felt by the public. The Budget has four gambits as far as health care funding is concerned, namely $700 million to increase the rates of salary and allowance for health care workers, $400 million to expand the scope of the Drug Formulary, $5 billion to introduce advanced medical devices and expedite the upgrading of medical equipment, and $10 billion to set up a public health care stabilization fund. It was uncommon in the past for the Budget to set out the purposes of funding allocations in such details. Usually a lump sum is allocated to the Hospital Authority (“HA”), but complaints abound about HA’s inefficiency and poor arrangements as it only stashes away the money and sits on it, resulting in great distress to health care workers. I believe that FS has already conducted studies or racked his brain in a bid to grasp the situation, and also expedited the allocation of resources by specifying the uses, in order to address public dissatisfaction with the inadequacy of health care services. However, I hope that HA makes proper use of the resources allocated by FS to improve its services. I also hope that HA applies for funding from FS based on its genuine needs, instead of sitting on a stash of money or having no idea how to use it.
In addition, in my view, the Budget has done a very good job in promoting economic development. It outlines a comprehensive road map for the development of financial services in Hong Kong, providing directions and measures in relation to stocks, bonds, asset management and insurance development, with the clear objective of strengthening the competitiveness of those Hong Kong industries with a competitive edge and giving full play to Hong Kong’s unique advantage as a truly international city in the Guangdong-Hong Kong-Macao Greater Bay Area (“the Greater Bay Area”). What is special about Hong Kong is that investors, or capital, mostly come from international markets, and the system of Hong Kong has also a connection with the international community on all fronts.
The Budget has also pinpointed innovation and technology as a new driving force for economic development. It does not just focus on commercializing research and development results and nurturing innovative technology enterprises, but also thoughtfully allocates $16.5 billion to refurbish universities or provide additional research laboratories, with a view to creating better conditions for university teachers and students to pursue high-quality research. These are real efforts to build up infrastructure rather than fish for compliments. They aim at laying a stable foundation for Hong Kong to consolidate its advantages. Therefore, sometimes I find it hard to understand why some Members are vehemently against putting resources into innovation and technology. They could have asked the Government to do better or do good results rather than use any ploys, but I believe that provision of resources is essential.
Regarding tax studies, not many people have noticed, but I have, that FS has transferred the Tax Policy Unit to the FS’s Office. The arrangement serves to strengthen the work in this area, and I have high expectations for it, because we used to say that Hong Kong has a very simple tax regime with low tax rates, but now that the global trend goes exactly the same way, we should not be stuck in the old ways, believing that the status quo suffices, should we? These studies really call for active efforts by FS, a tax expert, in order for Hong Kong’s tax regime to keep pace with the times. I hope that FS has the courage to propose measures to increase revenue. Of course, many people are opposed to sales tax, but I believe that all options deserve consideration. Granted that the concerns of the business community have to be addressed, would a levy on only luxury items be viable? In this connection, while we see a global trend of downward adjustment, how to increase Hong Kong’s revenue and not rely too much on land sales is also a very important issue for our discussion.
Now, I would like to talk about insurance. The insurance industry currently accounts for about 3.7% of Hong Kong’s gross domestic product (“GDP”). Many people often say that the share is more than 10%, but this is incorrect because there is another method of calculation for GDP. The insurance industry has made significant contribution to the economy of Hong Kong, but the problem with the Hong Kong market is that its development is already very mature. Notably, the penetration rate of insurance, i.e. the insurance depth, in Hong Kong has reached 17%, already the third highest in the world, and the insurance density has reached $8,000, the second highest in the world. From these it is evident that the insurance industry of Hong Kong has become highly mature, and the main growth in recent years has relied on insurance purchases by Mainlanders coming to Hong Kong. Therefore, the biggest problem facing the industry is how to expand its market space.
The State’s push for the development of the Greater Bay Area has created a new opportunity for the insurance industry of Hong Kong. To play a pivotal role of insurance hub, Hong Kong certainly has to increase its own strength. The insurance industry of Hong Kong used to lay its focus on local business. In order to leverage the opportunities brought about by the Greater Bay Area and the Belt and Road Initiative, it should in future further expand some international businesses that are greater in complicity, diversity and scale, including marine insurance, mega projects, railways, ports, and captive insurance. To achieve this goal, the insurance industry of Hong Kong requires a large number of insurance professionals. Therefore, the SAR Government should assist the industry in attracting large international insurance broker companies to set up headquarters in Hong Kong, so as to encourage international professionals to come and serve here. At the same time, an institute of insurance should be established in Hong Kong to nurture all levels of local professionals.
Many Members turn combative when they hear about the Greater Bay Area, but they do not understand that when looking back more than a decade later, they will find this an opportunity or a profound change. In fact, the Greater Bay Area ushers in great opportunities for the development of other industries in Hong Kong as well. With a population of only 7 million, the Hong Kong market is too small in the modern world of e-commerce. If the insurance industry can enjoy interconnectivity within the Greater Bay Area, the market for Hong Kong will gradually grow from 7 million to 70 million people, corresponding to a tenfold increase. This holds true not only to the insurance industry, but also to health care and other industries. As long as they take a firm grip of the market in the Greater Bay Area, they can certainly get around the present predicament. The current market is so mature that there is no way whatsoever to improve it. Nevertheless, Hong Kong products have always had the competitive edge and potential for development in the Greater Bay Area, so I believe that business opportunities are numerous.
Hong Kong’s insurance products are very competitive in terms of flexibility, diversity, currency choices, fast and reliable customer service and claim settlement process, etc. Therefore, I believe that there will be ample room for Hong Kong products to make inroads into the Greater Bay Area.
With the popularization of insurance, Hong Kong people have become accustomed to using insurance as a financial tool for the purposes of future security, saving and investment. In the Mainland, a need for financial management arises from increasing income, so insurance becomes popular among Mainlanders as a sound financial tool. Since 2005, Mainlanders have taken out more than 1 800 000 insurance policies in Hong Kong, most of which are critical illnesses, medical and savings plans, showing an extremely strong and rigid demand. In fact, by buying Hong Kong products, Mainlanders cannot just meet their needs for financial management, but also make future plans for health care, retirement, life insurance, children’s education, and so on. This is a very good phenomenon because it goes without saying that the Mainlanders who have made such preparations do not need to rely on national public resources to deal with their future retirement problems.
The insurance industry of Hong Kong is currently pushing for the establishment of an after-sales service centre in the Greater Bay Area. I know that the Government, on behalf of the insurance industry, is also actively pushing for the provision of after-sales services to Mainlanders who have already purchased Hong Kong insurance products, thus offering more convenience to customers with such services as enquiries, change of address, declaration and claims settlement. As I have pointed out, since more than 1 million Mainlanders have already purchased insurance products in Hong Kong, it is logical to set up an after-sales service centre.
Many people feel that coming to Hong Kong to take out insurance is an act of moving capital out of the country, and even some regulatory authorities share this view. In fact, that is not the case. Many of the insurance policies that we have sold are probably worth less than several hundred thousand dollars. The customers take out insurance because they want to consolidate and pass down their accumulated wealth in the hope of being better protected during their lifetime. Therefore, I hope Members understand that this trend will definitely take place. Our next step will be to push for the establishment of “Health Insurance Connect” and “Insurance Connect” in the Greater Bay Area, so that companies in Hong Kong and the region can sell to residents of the Greater Bay Area …
CHAIRMAN (in Cantonese): Mr CHAN Kin-por, Members should indicate in this session whether they support the Bill as a whole. They should neither discuss the policies or funding of individual departments, nor express views on the details of individual heads, amounts or amendments. The first and second sessions have already covered these details. Please return to the debate topic of this session and indicate whether you support the Bill as a whole.
MR CHAN KIN-POR (in Cantonese): Alright, thank you, Chairman. I already indicated my support at the outset of my speech, but now I just wish to point out why I support it. As I said earlier, apart from the fact that some of the key points other than insurance are valuable, I should also balance the speeches made by Members, because their one-sided negative comments fail to let Hong Kong people to know exactly … Hong Kong people are often focused on matters that are not directly related to themselves but rather inextricably related to the future of Hong Kong, so I have just raised a few points, including improvement of urban design, health care investment, economic development and tax studies. With these remarks, I wish to let the public understand that they should not look at things only on the surface, nor should they even begin discussion just after listening to what some newspapers or Members have said. Anyway, I am done with whatever I have to say. Thank you, Chairman.