Policies on Insurance
1) Stop over regulation and help develop business opportunities
Following the Lehman Brothers incident, the primary concern of the Government has been preventing recurrence of financial disasters. It is paying more attention to regulation than business development. On the contrary, our competitor Singapore has been aggressive in business development. The new Financial Services Development Council and the new Insurance Authority should focus on business development and support the industry to enter new markets. For instance, they should help expand investment choices in the mainland and seek relaxation on Renminbi assets to cover properties and securities for the benefit of all insurance companies. The Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone should also be promoted in order to help local companies to engage in mainland development. The Government should also set up special task forces to study protection for catastrophic events, captive and the development of HK into a reinsurance centre. Singapore has been working hard to grow these businesses with impressive results and Hong Kong should not fall behind.
2) Tax incentives for insurance expenses to encourage savings for rainy days
The new Chief Executive should honour his promise to introduce tax deduction for medical insurance expenses, including medical insurance expenses for family members. This is to encourage risk transfer from individuals to underwriters. In case of mishap, people need not look to the Government for assistances. Governments of many countries support and encourage their citizens to get insured. The more people are covered by insurance, the less people would rely on the Government. In turn, it would alleviate socio-economic pressure of an aging population. In the long term, tax incentives should be extended to other types of insurance including Life and retirement benefits. A recent survey conducted by the Life Underwriters Association of HK showed that 64.3% of the respondents supported tax deduction for life insurance products with savings elements and 73.1% believed that these products were good for them. Hong Kong citizens in general support tax deductions for insurance expenses.
3) Long term commitment to secure support of the Health Protection Scheme
The Government has been studying the details of the Health Protection Scheme (HPS). Many citizens are looking forward to the launch of a viable and sustainable scheme. The Government should release the detailed rules and regulations of the HPS as soon as possible for public consultation. I believe that the design and details of the HPS need the support of the consumers, the medical profession and the insurance industry in order to be successful. The Government should be open-minded and responsive to issues raised by all parties. On the other hand, I urge the new Government to review the earmarked sum of HK$50 billion for the Scheme in light of changing parameters. When the Scheme is launched in 2015, if on schedule, rising medical cost and further aging of population might call for modification of the original undertaking for longer term sustainability. Instead of annual cash injection for 25 years, for instance, an endowment might be set up with that HK$50 billion as seed money to invest and replenish annual payments. In fact, the crucial factor for a successful Health Protection Scheme is continuity. The Government should undertake to support and fund the scheme in order to eliminate any uncertainty.
4) Adopt the comments of the Insurance industry regarding the legislation of the new Insurance Authority and the Policyholders’ Protection Fund.
The IIA legislative proposals are under consultation and will be followed by the Policyholders’ Protection Fund legislation. Since these two pieces of legislation will have profound impact on the insurance industry, the Government must ensure that the comments of the insurance industry are taken into consideration to ensure that the two legislations are acceptable to the insurance industry and can be effectively implemented.
5) Review the liability cover for local vessels to provide comprehensive cover for passengers.
Since the Lama Island tragedy, there has been immense concern in the society over the amount of third party insurance cover of local vessels. The current minimum third party insurance requirement for a local vessel carrying more than 12 or up to 12 fare-paying passengers is HK$5 million and HK$1 million respectively. By comparison, the minimum third party cover for a road vehicle is HK$100 million. I urge the Government to raise the minimum requirement with the aim of providing a comprehensive protection for passengers and third parties.
Policies on Politics, Economy and Livelihood
1) Increase supply of public housing and raise accommodation rate
Analysts say that the more accommodative in public housing, the more stable is the community. Poverty would also show improvement. Take Singapore as an illustration, some 85 percent of people are living in public estates of the Housing Development Board. The city-state is known for its pleasant livelihood and social stability. At present, about half of the population in Hong Kong are accommodated by public housing, either rental or homeownership. I propose to raise the accommodation rate to, say, 60 percent, mainly with new rental units. For the private housing sector, the Government should supply adequate land for developers to respond to market demand.
2) Review population policy
According to immigration figures, settlers from the Mainland (arriving on single-trip permits) between 1998 and 2011 (Q3) amounted to 667,002 in total. They now account for 9.4% of total population. Among them, in terms of education, about 20 percent are primary level, about 70 percent reached secondary level and the remaining 10 percent reached tertiary level or higher. More than half of them used to be homemakers. As Hong Kong is a knowledge-based economy, many of them have almost no other choice but to take up low-level job. Some might even have difficulty in finding employment. Unless there is policy change to improve the quality of new settlers, any measure to tackle poverty would be unproductive. The Government should review population policy urgently.
3) Promote headquarters economy and attract international talents
Many countries and cities are pursuing headquarters economy. Our neighbours and rivals like Singapore, Beijing and Shanghai are attracting multinational enterprises to set up regional head offices with tax incentives. The Government should take positive steps to consolidate the role of Hong Kong as the international financial centre of Asia. We should consider attractive incentives like tax concessions and other attractions that would appeal to international enterprises in choosing Hong Kong for regional head offices and bringing in global expertise. In turn, they would create new jobs for the local labour market. New job opportunities and work diversities would broaden the scope of our young people and give them more room for social mobility.
4) Develop high value-added industries to help restore structural imbalance
The structure of the economy is imbalanced. It is highly skewed to services industry. Manufacturing has been in doldrums for years. Owing to repeated financial crisis, Hong Kong has suffered much from the structural imbalance. It is time to consider re-industrialization, particularly high value-added manufacturing, with the aim of providing more stable employment for the grass root. Even if economic benefits are not so significant, it still deserves government support. Many industrialists are willing and ready to invest in Hong Kong. What they ask from the Government are suitable land and policy support. It would be more efficient and effective than developing any other sector from scratch.
5) Support the working poor
The new Government should encourage the grass root to earn their living and support the working poor with measures that promote employment. The concept of “work-for-welfare” should be the basic principle. If personal or household income does not meet certain threshold, the Government would provide financial assistance and encourage people to continue working and earn their living. Transport subsidy for workers is an example. The new Administration should consider work-for-welfare in totality in long term and replace itemized and fragmented benefits by a comprehensive system. For instance, a person or household who is earning less than a certain sum would be eligible for certain financial assistance subject to mean test. It would allow low income persons or households more flexibility in applying public assistance.
6) Government led energy conservation campaigns
Conservation and renewable sources are the future of global energy development. The new Government should further study development in power generation and energy profiles. It should establish a high-level consultation framework and invite specialists to focus studies on joint development of renewable energy and conservation with the Mainland. The Government should take the lead to conserve energy, step up publicity and join hands with businesses and schools to hold campaigns on conservation and emission reduction. A territory-wide campaign would help develop the habit of conservation.
7) Improve air quality for protection of public health
Hong Kong is an international financial centre where global talents gather. However, air quality is so poor nowadays that many talents of multinational business are reluctant to come. The new Government should have the determination to improve air quality with multiple measures. I ask the new Administration to review replacement program of old model diesel commercial vehicles, including raising bonus payment or subsidizing de-registration, with a view to reducing these highly polluting vehicles on the road and improving road side environment.
8) Develop a Healthy City and promote Physical Exercise and Medical Check-up for the whole Community
As the population of Hong Kong is ageing, which will exert great pressure on the healthcare system, I urge the Government to comprehensively plan ahead policies on prevention of non-communicable diseases and health promotion, including studying the provision of regular basic medical check-ups for Hong Kong residents gradually and systematically, so as to prevent diseases through early diagnosis and treatment. At the same time, the Government should also formulate suitable medical check-up plans for different high-risk groups and promote healthy living and health education to encourage the public on all fronts to do more exercise, so as to enable Hong Kong to develop into a genuinely healthy city.
9) Increase international school places and attract international talents to come to Hong Kong.
As an international financial centre, the cluster of talents is key to a vibrant economy. However, the shortage of international school places is deterring talents from working in Hong Kong. In the coming years, there will be 5,000 more school places. However, as local demand is also increasing and there is mismatch of places by district, the Government should put forward short term solutions and long term planning to address both shortage and mismatch in light of unrelenting demand for international talents in Hong Kong.
10) Promote cultural, art, sport and entertainment business to help people pursue hobbies for spiritual fulfillment and help ease social discontent.
After years of high growth, the Hong Kong economy is reaching maturity. The sense of achievement from entrepreneurship and careers in good old days is no longer recurring. The Government should take steps to help the new generation pursue hobbies and resolve spiritual emptiness. Sociologists say that football is essential to social stability in Great Britain. The British are fond of football and spiritual fulfillment helps ease any social discontent. In Hong Kong, local entertainment business including popular music, television and movies were thriving in the last Century. The public, young people in particular, were fond of idols. They would look forward to new albums, movies and concerts. These used to be their spiritual pursuits. Local entertainment business has been on the decline in the new Millennium and losing its appeals to young people. Thus, the lack of spiritual pursuits could be a cause for social discontent among young people nowadays. Therefore, the Government should look into the matter and find better ways to help people pursue hobbies after work including culture, art, sport and entertainment etc. The Government should also help promote these industries.