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Transcript of CE's remarks at question-and-answer session at Joint Business Community Luncheon (English only)

    Following is the transcript of a question-and-answer session by the Chief Executive, Mr Donald Tsang, at the Joint Business Community Luncheon at the Hong Kong Convention and Exhibition Centre today (October 17):

Question: One comment and one question. My comment is that the Hong Kong Ocean Park is doing relatively well in comparison to Disneyland. Does the Government have any plans to bring in more theme parks or operator to promote Hong Kong tourism?

Chief Executive: Ocean Park is doing exceedingly well. Disney is still new but I think it's going to be a major tourist attraction in this part of the world.  We are not bringing new theme parks into Hong Kong. I think two will be quite sufficient for the time being. In fact both are expanding, particularly in Disney we have phase 2 to complete. This will be our activity for the coming year. Helping tourism is a major and continuous undertaking in Hong Kong. We are working hard with the Hong Kong Tourism Board. We are doing promotions throughout the year and particularly in Hong Kong we will try to leverage our exhibition facilities and we are also looking at providing more land for hotel building, making sure we continue to be competitive as a major tourist attractions and destination in the whole of Asia. This is one area where I will never concede that we will be in second place. In this area we will continue to look at new opportunities where we can make sure that tourists will have a good cause to come into Hong Kong to shop, to look at what we can offer, to enjoy our people, to enjoy what we can offer in the country parks and so on, and in particular theme parks too.

Question: You have indicated in your Policy Address that the Government will attract overseas talent by relaxing the Quality Migrant Admission Scheme. We support your proposal, but wondered if the Capital Investment Entrant Scheme could be similarly relaxed in consultation with the Central Government to enable mainlanders to settle in Hong Kong permanently under this category, thereby making economic contribution to Hong Kong.

Chief Executive: We have difficulty expanding the existing investor's scheme to the mainland because of the foreign exchange control on the mainland. That's the major impediment. We have no restriction on mainland people coming to Hong Kong through other means particularly by establishing a firm in Hong Kong or headquarters in Hong Kong then immediately we have talent coming with the company. You do not need a money investment as such, and the flow of cash and funds from the mainland is a continuous process. So far, I do believe we can see the mainland people, particularly those who are affluent, coming into Hong Kong either to invest, for recreation, for shopping, for a whole host of things. I don't believe it is an impediment as far as the scheme is concerned. The scheme itself will not be sufficient to attract the seriously rich people from the mainland. They have all sorts of means to come here without the needs for an additional scheme like this. The scheme will be looked at continuously - whether it is attracting sufficient people, whether it can be modified to suit the needs of the mainland. We are watching very closely. The major impediment in this as far as extension to the mainland is concerned under the scheme is foreign exchange control in the mainland which will be difficult to overcome. The other measures through which we are attracting mainland investors through our securities market, through our services sector and through our investment opportunities, and we are seeing them in quite a large volume at the moment.

Question: I have one comment and one question. The comment is that just now you said your Administration wants to see the result and I personally see a very great result because for the past six months the number of blue skies in Hong Kong is a lot more than ever before. I said this many times to my family members. Congratulations on your achievements. In your Policy Address you set aside $93 million to help factories in the Pearl River Delta area to improve the air quality. Can you tell us specifically how you are going to spend these $93 million. Is it in the form of a grant to the factory operators or in terms of the interest-free loan to help them buy and equip the pollution control equipment?

Chief Executive:  Ask Andrew Leung, is he here? The money will be given to him. They have a very good scheme. It is technology, process and improvement and all sorts. Don't expect a huge loan. It will be technology, consultancies and so on. It will be very well utilised. The scheme will eventually have to be approved by a finance committee but I am sure the details are being worked out by Andrew. He is very persuasive and we believe he has a good scheme going. It will be helping specifically, we hope, those firms, those factories in the Pearl River Delta in the upgrading process; make the technology cleaner and the general production more efficient. Details will be announced and it will be done through the Hong Kong Productivity Council.

Question: I am from Taipei. Mr Tsang is the best Chief Executive Hong Kong has ever had. I have been here since 1986. I have a concern about Hong Kong and that is air pollution. A few days ago the Government sold two more lots of land - not in Central - and got a high price. I hope the Government could invest more in our future and environment. I have five children here and I am always thinking where could I go ahead except Hong Kong because we love it so much.

Chief Executive: I can assure you, protection of the environment - producing cleaner air - is a major commitment and pledge of my Administration. Even today, in the context of the business community, I mentioned this subject. Not only is it a subject close to my own heart and I know it is important to the whole of Hong Kong, not only for the present generation but future generations.  We are working very hard in every aspect, whether it's the use of fuels, conservation of energy or co-operation with our Guangdong neighbours to ensure the regional air quality will improve over time. I wish to ensure you your five children will be living very happily here similar to my grandchildren that I hope to have. I know it is an integral part of Hong Kong's attractiveness. We will leave no stone unturned. We will put in as much investment as necessary, as many policies as needed to ensure the air quality of Hong Kong will improve during my current term of office. And we set a foundation for further improvement beyond my term.

Question: I am actually speaking on behalf of myself and perhaps a number of people in this room who employ helpers in Hong Kong. It relates to the tax relief that you announced where I think you quite properly noted that people of Hong Kong had made sacrifices during tough times and it was time to give some relief when times were a bit better. One of those sacrifices was a levy that was imposed on the helper community of about 10%. I haven't heard any talk of removing that levy. It strikes me as a very heavy tax on a low paid part of our community and a part of our community in which many of us in this room depend for our quality of life in Hong Kong and to enable us to participate in the workforce. I would welcome your comments as to whether any thought has been given to reversing that tax on this particular part of our community.

Chief Executive: The tax is not on the helper, it is on the employer, not on them. I believe someone who employs a foreign domestic helper should contribute to the training of the local workforce, and that's what the money will be used for. As far as the wage level of the domestic helpers is concerned, there was one major reduction because of the lowering of general wage levels in Hong Kong. We have been generally raising it every year consistent with the wage levels in Hong Kong. As far as the levy is concerned, the levy is on the employer, not the employee. I have no plan to do this because I believe you can afford that. Not only that, you are doing Hong Kong a good turn in that it is now generating $1.5 billion a year for the training programme to improve our human resources stock. And that is part and parcel of the Policy Address this year. One thing I can assure you, I will return all taxes which remain unused in the Government. I have done this in the Policy Address this year. The Financial Secretary followed them through. We reduced for instance, the income tax, the salaries tax of salary earners. We also promised the reduction of corporate profits tax and we also reduced rates for the last quarter of this year. This will be the principle throughout my Administration. We will not unnecessarily raise taxes. Any unused taxes must be returned to the payers and if possible used for the community as well. As far as the domestic helpers' levy is  concerned, I have no plans of doing that. Sorry I cannot satisfy you on that. But I promise you that every cent, every levy collected will be well deployed for the improvement of the general quality of our workforce in Hong Kong.

Question: It was great to see you announced 10 large infrastructure projects to be implemented during your term to support economic growth. This is good for the construction industry where people have been unemployed and more importantly a lot of people have been underemployed, taking jobs at a lower level than they have been trained for. In addition we have also seen that a lot of higher educated, particularly with engineering skills, have moved overseas in the last couple of years because of a lack of projects. Within the construction industry there is however some concern with regards to the timing of the implementation of your 10 projects. If you could comment on that. My second comment is on public-private partnerships. During your election campaign you made a reference to the implementation of public-private partnerships. You have done so in the past. The 10 projects which have been announced are all going to be funded either by the rail companies or the Government. Given the fact that private-public partnerships are not about just financing, but by efficient procurement method on an asset with a total project lifetime costing approach, we would appreciate if you would consider again the implementation of PPBs in the future.

Chief Executive: I entirely agree with you that we have not been doing enough to put public investment in infrastructure. A city like ours needs continuous investment - investment in hardware, investment in software. We need the knowledge and public support to ensure this investment will produce clean results, will take care of environmental concerns, and I am  quite confident we will do that. But investment must be made. For instance, this year we are prepared to spend $30 billion on public works, and I think we would like to spend only $20 billion. This is rather sad because private investment follows public investment. If there is a slowing down of public investment then private investment will not grow as well. I agree entirely with you that we must have sufficient determination to push through these projects. As far as timing is concerned, I am trying to be realistic. One thing I hope not to do is promise things I cannot deliver. So I am rather conservative in the timing of various projects in terms of start date and completion date. But I must also have regard to the legal processes which lead up to the construction work which I am sure the people of Leighton realise. The gazetting work, giving people the chance to object and so on. While we make these dates known, we will do our utmost to bring these dates forward as much as possible during the implementation stage. As far as the 10-infrastructure programme is concerned, we have total investment of $250 billion, the bulk of which will come from the private sector. In other words, I'll be looking at not only to the statutory bodies like the Mass Transit Railway or the Airport, and for people like that to make investment. I am looking to the private sector to do partnership programme with us. So this is very much alive and necessary in the implementation of all these 10 projects. Not only in these 10 projects for that matter, even in the extension of public health scheme we will make much better use of private resources in our future programme. This will be made known when we consult the public on what we need to do on public health reform and the funding of such new resources, funding of new facilities needed in the coming years. So, let me assure you, infrastructure programme will be important and investment will be a priority having regard to environment protection and heritage preservation. At the same time we are pushing these projects as quickly as possible in terms of start date and completion dates and we are making good use of private sector resources in the process.

Ends/Wednesday, October 17, 2007
Issued at HKT 17:56


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