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Following is the transcript of a question-and-answer session by the Chief Executive, Mr Donald Tsang, at the Hong Kong Business Community Luncheon at the Hong Kong Convention and Exhibition Centre today (October 17):
Question: Same time last year, exactly one year ago, I raised the question with you on the anti-racial discrimination law. Allow me to read my last year's question - I want to thank you sincerely for giving a lot of importance to social harmony, including racial harmony. I also want to thank you for emphasising that any kind of discrimination, including racial discrimination, is not acceptable. The Hong Kong SAR Government accepted in 2001 that there was a need to introduce a legislation to prohibit any act of racial discrimination. Now it's several years and the bill has still not been passed. Can I ask you the reason for this constant delay? In response, you had assured that the bill would be passed during your current year and we expected the bill would be introduced into Legislative Council before September 2006. But we don't see that. Also, we have not seen anything in your Policy Address addressing the problem of anti-racial discrimination law to be introduced. I would be grateful if you could clarify, or you could give a timetable when the bill would be introduced into Legislative Council.
Chief Executive: It is my pleasure to reassure you that thing will go to Legislative Council before the end of this calendar year. In other words, today is October 17. I am doing my very best to get it through the Administration and I will get the endorsement of the Executive Council. My main intention is I will get it to Legislative Council before the end of this calendar year, within the next two and a half months.
By the way, question of not including things in the Policy Address now lurks. I wanted it to be short, sharp and crisp, to focus on the things which are new, hoping that you will accept all the commitments I have made, all the pledges I have made and I have documented all this in the Policy Agenda. Racial harmony, in particular the Race Discrimination Bill against race discrimination is in that book. In future you have to kiss goodbye, I will tell my successor. Make sure you don't make only a one-hour speech. Go for a longer speech to cover every corner, every bit.
Question: I would like to ask the Chief Executive, the Government's scorecard on co-ordination and integration with Mainland China in environment, tourist and infrastructure has been very impressive. It's been highlighted in the address this year. What are the major challenges and possible solutions for the rest of this Administration for the Chief Executive sees in terms of liaison with the Mainland authorities, not so much in Beijing but at the provincial and municipal levels?
Chief Executive: This has been an important challenge. I am afraid nothing will replace personal contacts and making visits and making friends. I have been doing my very best at a provincial level as far as the Pearl River Delta is concerned. During the past year as Chief Executive I have done as many visits as possible onto the Mainland and I will continue to do the same, particularly focusing on the cities and the provinces in the Pan-Pearl River Delta - the nine provinces around Hong Kong, and this I will continue to do. And not only me. I think all of you here, gentlemen and ladies present here today, should accompany me to help me do this work and go onto the Mainland to get the message across as much as possible. I've done, for instance, in the Pearl River Delta, I've been to Yunnan, I've been to Guangxi and I'm going again. I've been to Hunan and I'm going shortly to Jiangxi Province, I'm going shortly also to Guizhou. And I want you to be with me as well to make sure the Hong Kong message is spread there; the sort of service we can provide there, the way we are able to help them grow and at the same time help us grow. I'm sure it is in the best national interest and I will do that. But it will not be an easy job. It means all of us, we have to go in and talk and we must invite people to come out and see for themselves the sort of services, the whole range of services which Hong Kong is well equipped to provide for them to use Hong Kong as a springboard to the rest of the world.
Question: The question about pollution. I'm sure the Hong Kong SAR Government has done a lot to control pollution and so the government in the Pearl River Delta area. But does the Hong Kong SAR Government together with the government in Guangdong have any common agreement or common practice in order to reduce or control the pollution in order to achieve a better synergy effect?
Chief Executive: We have already signed an agreement with the Guangdong Province to cut all emissions by a certain percentage, most of them by half by the year 2010. This has been on the cards. They have been signed. They are delivering their part of the bargain. We are doing our best. We have done all the sectors with the exception of one and we are still negotiating and that is in relation to emission of sulphur dioxide by power companies. And that we are working on. What we are doing now is go beyond what we are committed. For instance, an incentive we have provided in the Policy Address in relation to vehicular emissions hopefully will help us go beyond what we have already pledged. The Mainland authorities in fact are doing that. They are putting all sorts of equipment and gadgets to de-sulphur their power plants and at the same time they are introducing new measures. In other words both sides are working towards reduction of emissions across the board by a significant amount by the year 2010. We are going to deliver that. The problem is, this will not happen overnight. We have to make time and we have to do our very best and we are also dealing with a developing neighbour of Guangdong, Pearl River Delta. So they have to strike a balance between economic growth on the one hand and good environment on the other. I believe they are working on that and that as you know is a national priority in the latest 11th five-year plan.
Moderator: I want to pull one line from the Policy Address which says that "we will be able to help make a difference to our air quality if we are committed to energy saving". I think that's one reason that the Chief Executive has been so supportive of the Clean Air Charter which is a joint effort by all the international chambers working together and via the business coalition of the environment. Mr Tsang will sign the Clean Air Charter on behalf of the Hong Kong SAR Government on November 27 at the Business for Clean Air Conference. I urge you, we business people are very efficient in Hong Kong, so don't lag behind the Government this time and sign the form on your table. Sign it and bring a few forms back and encourage your business partners, your friends, everyone, sign it before Mr Tsang signs it.
Question: On Friday you and I were on the radio and prior to answering my question you discussed the pollution issue. One of the comments you made was that pollution coming from China is a visibility issue and not necessarily a public health issue. Having thought about it for a few days, do you still consider the 75% of our pollution here in Hong Kong is just a visibility problem or do you consider it a public health issue?
Chief Executive: I have spoken a lot over the last few weeks. On visibility, of course it's a question of degree. You are talking about the small particulates of 2.5. Of course it does. But the question is to what extent? What is the most important thing we need to tackle first? And do not equate visibility directly with just very bad air. We are doing our best. What is important here is we have to do what we are committed to do. What you are leading up to is the latest WHO standards. You have to remember they are very high standards. The UK said they are not able to reach those standards in the year 2020. And the US on their part, never mind this present charter, the previous standards were not recognised by them in the first place. They have not yet signed the Kyoto convention. So all these things you have to put into perspective. We have to do our very best but don't force us to go on a path where I cannot deliver. Now, visibility is important. What we are doing, we are talking about clean air, what about blue sky. Blue sky implies visibility and for that reason, that certainly is my priority.
Question: I think we are all very encouraged, at least in the industrial sector, at what you propose and what you have in mind as a policy against pollution and all that. At the Federation of Hong Kong Industries our newest industrial group is actually the group of environmental protection, environmental industry and recycling. We are just wondering, since you mentioned in your Policy Address it's a good idea for the business world to start doing green purchase policy, we were just wondering if in the SAR Government you have such a policy and if you haven't, is there a timetable for you to lead by example? This will be very helpful to the development of Hong Kong's environmental recycling industry which should be a very important part of this Keep Hong Kong Clean and environmental protection campaign.
Chief Executive: It is already part of our policy in our procurement. In fact, we are now reviewing our vehicular purchasing programme as well in the light of what we have decided to do. Definitely we are doing what we can and I'm sure this is the sort of thing we can continue to do more. I would like very much for you to remind me the sort of thing that the Hong Kong SAR Government can do and should be doing in this regard. I am happy to lead the way. Now, I am doing it already in procurement for most of our consumable items and I am doing it for vehicular purchases as well. I am quite happy to do even more. Anything you want to mention please, we are happy to explore.
Question: I am a big supporter of broadening the tax base in Hong Kong. But what if the GST measures does not get pass, would you consider other alternative measure to achieve that goal?
Chief Executive: Well, you'd better ask the Financial Secretary. But I'm sure we are doing the right thing. Whether we can get a consensus on GST is a different thing. But it's important for all of us to debate this issue, to understand the problems involved. This is the best time to do it because the Government does not need money now. We are able to balance the budget and the community should focus on the best way to ensure we have the resources to do the thing we all wanted to do - cleaner air, better hospital, longer life expectancy, better social welfare, better roads, better everything. But all these things cost money, particularly in areas like education and public health. For that reason, we have to equip ourselves. We believe after studying six years on this subject, GST is the best way forward. If you disagree, which you are entitled to, just let us know what the better method of doing so is, to prevent this community from running out of resources to do things we need to do as we all get older, as the resources being concentrated and being generated by much smaller number of people. That's the challenge we have to face up to.
Question: Mr Tsang, it is a very good address. I concur with you that we need to work closely with Mainland China. I live in Shanghai right now and I come to Hong Kong a lot. We've done a lot of businesses here. I represent a Canadian Government-owned financial institution. We believe in creating a win-win situation but we also find recently that we are encountering obstacles, probably some outdated government legislation that prevent us to do more with Hong Kong companies to create more economic benefit in Mainland China. If I may ask, would your Administration be open to reviewing those outdated legislation so that institutions like us can work closely with Hong Kong companies in doing more to create benefit between Hong Kong and the Mainland, for a win-win partnership for my country, for Hong Kong and for Mainland China?
Chief Executive: You have to be more specified than that. Which legislation are you working against?
Question: It is the Inland Revenue Ordinance.
Chief Executive: We have the lowest taxation in the world. Be careful of what you say.
Question: It is not about your legislation. It is primarily that the legislation does not allow companies to borrow from financial institutions that are not really banks, so that they can deduct interest payment. That's what I'm referring to.
Chief Executive: You are asking a very technical question. If your company is preventing your expansion plan to Mainland China because of that, which is a rule which applies almost universally throughout the world. Does Canada allow you to do that? I wonder. Does Canada allow you to deduct taxes for this purpose? I'll remember this and will talk to my tax adviser on this. But you are asking a very technical question but that's not anachronistic. You remember one thing, we have a territorial tax system. We do not have a globalised tax system. We do not have a worldwide tax system. In other words, we are trying to do whatever we can here. We are not going to do extraterritoriality in this. But we have to be careful about what we collect. We do not want people to evade our taxation system. We want to make sure they do the very best to pay the little taxes we need in Hong Kong so that we might not have to introduce GST too quickly.
Thank you very much for listening me out. I'm very excited by this gathering here. I do ask you to work with us. There are great opportunities unfolding in front of our eyes in the Mainland of China. We must work together and I am sure that we have your support in the past and I'm hoping you are going to provide the same level of support in the years to come. Thank you very much.
Ends/Tuesday, October 17, 2006
Issued at HKT 18:33
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