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D. Investing for a Caring Society
66. The progress of a society is measured not just in terms of per capita income, air quality and cultural and creative activities, but also in interpersonal relationships. This includes how people care for the disadvantaged and whether they are good Samaritans. These are social benefits that should be brought about by economic development.
67. While our economy is back on track, the extent to which different sectors of the community share the fruits of prosperity varies. Some low-income families are under pressure, and the onset of inflation only makes them more anxious. I fully appreciate their worries and will try my best to alleviate their problems.
68. Experience elsewhere indicates that the most effective way to tackle the poverty problem in the long run lies in reducing inter-generational poverty. The key is to provide the younger generation of low-income families with favourable conditions for upward mobility. To this end, the Government intends to implement a 12-year free education programme and provide more opportunities for retraining. Coupled with the Pre-primary Education Voucher Scheme, these measures can help children of low-income families grow and learn from early childhood to adolescence. We want to enhance their ability to improve themselves and to lay a solid foundation for their future.
69. We will make substantial investment in infrastructure, help our economy power ahead, attract more quality migrants, and provide more training and retraining opportunities for aspiring individuals. All these are essential to create jobs. The Government will actively adopt a multi-pronged approach in dealing with issues concerning people's livelihood, in particular the economic hardship faced by people at the grassroots level.
Returning Wealth to the People
70. When standing for the Chief Executive election, I have pledged that in this term, I would provide tax relief, which includes gradually lowering salaries tax and profits tax rates to 15%, if fiscal conditions allow. The consolidated surplus for 2006-07 is about $3.5 billion higher than the revised estimate in the 2007-08 Budget. To date, public revenue figures for 2007-08 are better than expected in some areas. I have therefore decided to introduce the following relief measures:
(1) Tax Reduction: With the consent of the Financial Secretary, I am pleased to announce that the standard rate of salaries tax will be reduced to 15% in 2008-09. Given the significance of profits tax on the Government's revenue, I intend to adopt a prudent approach by initially offering a one percentage point cut to 16.5% in 2008-09. These two measures will cost the Government about $5 billion annually. We will consider further profits tax relief if our economy remains robust and our public finances stay sound.
(2) Rates Relief: The Financial Secretary has announced waiving rates for the first two quarters of the 2007-08 financial year. I am pleased to announce that rates for the last quarter will also be waived, subject to a ceiling of $5,000 for each rateable tenement. This will cost the Government $2.6 billion.
Social Enterprises
71. The widening wealth gap is a global trend. Today, corporate CEOs and sports superstars take home astronomically high pay, while many people's income remains stagnant. I believe that to prevent the widening wealth gap from becoming a serious social conflict, it is important for the well-off to care for the disadvantaged. Enterprises should fulfill their social responsibilities. To translate this into action, the business community and professionals should actively volunteer to participate in charity work including promoting the development of social enterprises. Hong Kong has an excellent track record in charitable activities. This is clearly shown in our people's generosity in providing relief for disaster victims of the floods in the Mainland and the tsunami in South Asia. In this new era, we have to foster a new caring culture in Hong Kong. We need to nurture more social entrepreneurs to achieve our social goals with entrepreneurial thinking and commercial strategies.
72. In my election campaign, I have pledged to promote the development of social enterprises by motivating a tri-partite collaboration among the Government, business and society. With concerted efforts, we can promote the development of social enterprises and boost employment. Eligible operators of social enterprises are not only non-profit-making organisations. The business community can play an important part as well. I have already received a series of social enterprise projects from non-government organisations. I will invite non-profit-making organisations and the business community to participate in these projects. I will also convene a summit on social enterprises before year end.
Enhancing Employability
73. Employment is an issue that has to be tackled by setting long-term strategies. Hong Kong's economic growth model has changed. The need for training and self-improvement is not just confined to low-skilled, low-educated and middle-aged workers. We need to turn our training policy into a long-term social investment. The Employees Retraining Scheme is now providing 100 000 training places a year with an annual expenditure of about $400 million. The accumulated employees retraining levy paid by the employers of foreign domestic helpers is some $3.5 billion. The levies collected will be used to fund a comprehensive expansion of training schemes under the Employees Retraining Board (ERB). This includes relaxing the age limit of eligible trainees (currently set at 30 or above) to cover people aged 15 or above, and relaxing the eligibility criteria from secondary three or below to cover those with an education level at sub-degree or below. In addition, the ERB will offer training programmes that are more diversified and geared towards market needs. The number of training places will increase by 50% to 150 000 by 2008-09, and to 200 000 by 2009-10.
74. The Government's effort to expand the training schemes requires support from enterprises. Enterprises have a duty to allow employees sufficient time for training. Employers can also take the initiative by providing training for employees.
75. The ERB is now conducting a strategic review to upgrade its services and operation. This will include tailor-made on-the-job training schemes and other support services to those with employment difficulties to help them find suitable jobs and reduce their reliance on welfare. The ERB will also work closely with the industrial and business sectors, in particular small and medium enterprises and social enterprises, to gain a better picture of their manpower and skill requirements and assist enterprises of different trades with human resources development and continued skills upgrading.
76. We will buttress the employment support for our young people by providing 3 000 three-year employment opportunities for those aged between 15 and 29.
77. We will examine how to rationalise, integrate and enhance the employment and training services currently provided by the Labour Department, the Social Welfare Department (SWD) and the ERB. We will also launch a pilot scheme to trial the one-stop employment support mode and on-the-job training. We hope that the revamped service mode will more effectively help the unemployed.
Minimum Wage
78. In respect of wage levels, I will pay close attention to the mid-term review conducted this month of the Wage Protection Movement (WPM) for cleansing workers and security guards. If the mid-term review is unsatisfactory, we will further promote the movement as well as proceed immediately with the preparatory legislative work on a statutory minimum wage. An overall review of the WPM will be conducted in October next year. If the voluntary movement has failed, we will introduce the bill on a statutory minimum wage for security guards and cleansing workers as early as possible in the 2008-09 legislative session. I call on our enterprises to share the fruits of their success with their staff to maintain their service level and retain quality staff. Otherwise, the Government will resort to legislation.
(To be continued)
Ends/Wednesday, October 10, 2007
Issued at HKT 12:14
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