Opening remarks by CE at Question and Answer Session in Legislative Council
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Following is the translation of the opening remarks by the Chief Executive, Mr Donald Tsang, at the Question and Answer Session in the Legislative Council today (July 16):
Madam President, Honourable Members:
Last time when I attended the Q and A session, I pledged to come up with measures in my Policy Address in October to improve people・s livelihoods to address the problems resulting from the rising cost of living. Today, however, I think that it・s time for immediate action because global oil and food prices have increased rapidly in the first half of the year. The drastic price increases, which have traumatised various societies and governments, have upset the lives of Hong Kong people and our social harmony. Therefore, I have decided to announce some short-term relief measures today to alleviate the pressure on the grassroots and middle-class community as a result of high inflation. This is an unusual time and we need to adopt unusual measures.
The short-term relief measures to be introduced are aimed at bridging the gap between rapidly rising prices and the slow salary growth faced by the grassroots. Last year, the Policy Address set out to use an infrastructure programme and development to spearhead economic growth. It was hoped that by 2010, the implementation of various infrastructure projects would lead to salary increases. However, with the rapid price increases and the relatively slow salary growth in the grassroots, the discord has created social unrest. In the mid-term, I believe inflation will drop. When the projects start, the salary growth will catch on and the pressure on our daily life will ease.
However, from now to the end of 2010, it will be a tough period for the grassroots. When we were drafting last year・s Policy Address and this year・s Budget, we were already aware of global soaring inflation and the global trend of economic slowdown as a result of the US sub-prime crisis. As Hong Kong is an open economy, we have very limited options in implementing policies to solve the inflation problem caused by rising import prices.
As far as allowed by our financial situation, we have implemented tax reductions and other measures to leave wealth with our people. This year, the Financial Secretary unveiled in his budget a package of relief measures including tax reduction, rates waiver, rent payment for public housing tenants, extra payment of Comprehensive Social Security Assistance, Disability Allowance and old-age-allowance, as well as electricity subsidy. These measures are being implemented gradually and will start to bring relief to people in the second half of this year. In view of the rapidly worsening inflation problem, people with low-income are worried about the post-2008 economic situation. In the past few weeks, I have been focusing on these livelihood issues and after discussing with various secretaries and gaining the support from the Financial Secretary, I now suggest the following measures in order to further reduce residents・pressures brought by increasing daily expenditure .
(1) MTR student fare concessions
Following discussions between the Government and the MTR Corporation, the board of directors of the MTR Corporation has agreed to offer half price concessions to students travelling on the former KCRC Line. The MTR Corporation will announce details in due course.
(2) Payment of public housing rent
The Government will be paying the rent for public housing tenants for one month in August. Now we will pay two more months of rent on their behalf, making it a total of three months.
(3) Assistance for new school year
Apart from the existing subsidy provided, the Government will offer a one-off allowance of $1,000 to each student receiving Comprehensive Social Security Assistance and other forms of student assistance (including students in kindergartens, primary schools, secondary schools and tertiary institutions), in a bid to ease the pressure from the expenditures of the new academic year.
(4) Old Age Allowance
The Government has already offered $3,000 special bonus to eligible elderly people in June. We will offer two more months of old age allowance.
(5) Comprehensive Social Security Assistance (CSSA) and Disability Allowance
The Government will offer an extra month・s standard rate payment to recipients of CSSA and Disability Allowance, in addition to the extra month・s standard rate payment already offered to them in June this year.
(6) Suspension of Employees Retraining Levy for two years
The Employees Retraining Levy will be waived for the coming two years to relieve the burden on middle-income families hiring foreign domestic helpers.
(7) Electricity charge subsidy
Besides providing half-year electricity charge subsidy to all households from September, the Government will offer an additional subsidy of $1,800 per household for a further six months. Together with the subsidy announced by the Financial Secretary, the total subsidy will amount to $3,600 per household.
(8) Food assistance service enhancement
The Government has earmarked $100 million for the Social Welfare Department to work with non profit-making organisations to provide short-term food assistance services in order to help more needy families.
(9) Freezing of government fees and charges
The Government will freeze various fees and charges related to livelihood matters for one year.
(10) Price information on daily necessities
To provide the public with timely and accurate price information on daily necessities, the Government will help the Consumer Council expand its monitoring of prices in supermarkets, stores and markets. It will also liaise closely with the Mainland to ensure stable and adequate food supplies to the territory.
This package of relief measures, worth about $11 billion, will not fuel inflation. The exemptions, concessions and subsidies announced in this year・s Budget have resulted in an increase in government expenditure and reduction in revenue for 2008-09, involving a total of $46.5 billion. Taking into account the relief package just announced, and other additional expenditures, we expect a higher fiscal deficit and a slight fall in financial reserves. However, the Government・s sizeable fiscal surplus last year makes it possible to make additional commitments. Most of the relief measures are one-off or with a time limit, and thus will not have major or long-term implications on public finances and the operating account. The Government, as in the past, will continue to strive for fiscal balance with prudent management of public finances
For most of the measures announced today, the Government will submit the funding application for the Legco Finance Committee this coming Friday. It is hoped that they could be implemented as soon as possible after Legco・s approval. Since the suspension of collection of the Employees Retraining Levy involves the amendment of the subsidiary ordinance, the Government will prepare the relevant amendment as soon as possible. After its endorsement by the Executive Council, it will be implemented in September this year.
Most of the relief packages and policies announced today are one-off and short-term measures. Other social issues of public concern, such as the review of old age allowance, the legislation of minimum wage and the monitoring of oil prices, will also be followed up. In the preparation of the Policy Address, I will pay more attention to public opinion and listen to the views expressed by different sectors in order to come up with a Policy Address that addresses the needs of all Hong Kong people. After the Legco elections, I will sit down with you again to discuss our agenda and policies on livelihood issues in the coming year.
Thank you.
Ends/Wednesday, July 16, 2008
Issued at HKT 15:34
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