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Budget Speech by the Financial Secretary (9)

Research Grants

67. We will increase the number of calls for Innovation and Technology Fund (ITF) applications each year and expand the funded technology areas.  We have also relaxed the criteria for the Internship Programme under the ITF to allow more local talent to participate in such projects.  We have also raised the grant ceiling for each project funded under the Small Entrepreneur Research Assistance Programme to $4 million to enhance the competitiveness of enterprises in product and service research.

68. The Finance Committee has approved the establishment of an $18-billion Research Endowment Fund, and we will also progressively provide 800 additional places for postgraduate research programmes in three years starting from the 2009-10 academic year.  These will help increase our research capacity and competitiveness, and attract outstanding researchers, educators and more high value-added enterprises to Hong Kong.

Creative Economy

69. Creativity is an important element for enhancing productivity and competitiveness.  As a pluralistic international metropolis, Hong Kong offers fertile ground for the growth of creative industries.  At present, Hong Kong has approximately 32,000 creative industry-related establishments.  They contribute over $60 billion annually to our GDP.  The Chief Executive announced in his Policy Address the integration of existing government resources to set up a dedicated office to co-ordinate work on the development of a creative economy and give more effective support to this important sector.  It is expected the office will be set up in the middle of this year.  Currently, the Film Development Fund and the DesignSmart Initiative provide effective support to the film and design industries respectively.  I will earmark $300 million for the development of other creative industries in the coming three years.

70. We will promote the use of design and nurture more local talent to drive the development of the design industry, incorporate the elements of design and creativity into education, promote the development of the local film industry through the Film Development Council's efforts to expand markets for Hong Kong films in the Mainland and Southeast Asia, and provide financial support to further incubate more digital entertainment companies.  We will also develop creative industries with strong local characteristics through the promotion of culture and art.

71. We will continue to promote the accomplishments of our creative industries in the Mainland and overseas.  Our participation in the World Expo to be held in Shanghai in 2010 will provide a particularly good opportunity to promote the updated Brand Hong Kong and demonstrate our quality of life and the characteristics of our innovative city.  Hong Kong has also been selected to take part in the Urban Best Practices Area Exhibition, where we will showcase our success in the extensive use of smartcard technology in Hong Kong under the theme "Smart Card, Smart City, Smart Life".

72. Through my invitation to a renowned local cartoonist to produce the comic "Tomorrow - Future for Today" to promote the Budget, and through the use of new modes of electronic media to invite public opinions, I have signalled the Government's commitment to make use of local creative industries as well as my commitment to greater public participation in the Budget process.

Green Economy

73. With increasing demands for a better living environment, promoting investments and economic activities that protect the environment and save energy will put the overall economy on a more sustainable path.  Promoting a "green economy" will enhance Hong Kong's overall competitiveness as well as making it a more liveable city.  We must boost efforts to help people and enterprises expand the opportunities of a green economy.

Hong Kong/Guangdong Co-operation in Environmental Protection

74. Under the "Outline of the Plan for the Reform and Development of the Pearl River Delta", we will co-operate with the Guangdong Provincial Government to take forward the concept of transforming the PRD region into a green and quality living area.  We will extend the existing areas of co-operation to other domains in order to turn the region into a cluster of high-tech, low-pollution and low-energy-consumption cities.  We will further develop regional high-tech recycling industries, and encourage enterprises to adopt advanced technologies for cleaner production, energy saving and emission reduction.  On the basis of the Memorandum of Understanding on energy co-operation signed by the HKSAR Government and the National Energy Administration, we will encourage energy enterprises of the two places to increase their co-operation in the supply of electricity and natural gas as well as the construction of related infrastructure.

Electric Vehicles

75. In recent years, there have been breakthroughs in the technology for electric vehicles.  Automobile manufacturers are actively exploring using new generation batteries to develop electric vehicles with longer travel range that can better satisfy drivers' needs.  The door is opening to wider use of such vehicles, which are more energy efficient and emit no exhaust gas.  Automobile manufacturers expect that new generation electric vehicles will be put on the market in the coming few years after technical problems such as battery capacity have been solved.

76. Promoting the use of electric vehicles will create additional business opportunities.  In 2006, the Government established the Hong Kong Automotive Parts and Accessory Systems R&D Centre.  Through the research efforts of local universities, some local companies have started to produce electric vehicles for sale in the UK market.  We hope that the industrial sector can grasp this opportunity to develop and produce parts and accessory systems for electric vehicles in collaboration with the Centre.  Moreover, the Government will study the feasibility of jointly promoting electric vehicles with manufacturers.  We will be actively involved in vehicle tests conducted in Hong Kong with a view to introducing electric vehicles into our market early.  We will also consider introducing such vehicles into government fleet when the related technology has matured and the vehicles are available on the market.

77. To further promote the use of electric vehicles, I propose to extend the exemption for electric vehicles from First Registration Tax, which is due to expire on March 31, 2009, for a further five years instead of three years as in the past.

78. Re-charging facilities are crucial for the wider use of electric vehicles.  We will examine the feasibility of providing re-charging facilities in government multi-storey car parks and explore ways of encouraging the business sector, including property developers and private car park operators, to set up such facilities.  I will lead a steering committee to study the wider use of electric vehicles in Hong Kong.  The committee will carry out in-depth studies and make recommendations from the perspectives of economic development, town planning, industry, technology, environmental protection and transport to take this important first step towards cleaner, more efficient transport technology.

Green Buildings

79. Buildings account for some 90 per cent of our total electricity consumption.  Much needs to be done to improve energy efficiency in buildings.  We will allocate about $450 million to carry out minor works in government buildings in the next two years to install energy efficient lighting systems, retrofit plumbing with water saving devices and incorporate energy efficient features in air-conditioning, elevator and escalator systems.

80. Environment and Conservation Fund has agreed to allocate $450 million for private building owners to conduct energy-cum-carbon audits and energy efficiency improvement projects.  We expect to subsidise over 1,600 projects.  This will also create business opportunities for related sectors.  I call on the owners of private buildings to make good use of the funding scheme to improve energy efficiency.

81. Government initiatives and efforts of the community are of equal importance.  With the support of the Construction Industry Council, the Hong Kong Green Building Council will soon be established.  The Council will comprise representatives of the construction industry and professional sectors.  It will help raise public awareness of green buildings and facilitate exchange and technological co-operation between Hong Kong and the rest of the world.  We welcome the establishment of the Council, and will support its work.

(To be continued)

Ends/Wednesday, February 25, 2009
Issued at HKT 12:10


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