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Budget Speech by the Financial Secretary (5)

Investing in Education and Optimising Human Capital

72. The importance of education is beyond question.  Investing in education enhances the knowledge of both individuals and the community at large.  Through skills training, people can acquire the tools for self-reliance to improve their livelihood and realise their goals.  For the community as a whole, a diverse pool of talent can promote social mobility and sharpen competitiveness, providing a long-term economic driver.  I shall now put forward measures to invest in education and optimise Hong Kong's overall manpower structure.

Developing Human Capital

73. Estimated recurrent expenditure on education for 2013-14 is $63 billion, which is more than one-fifth of recurrent government expenditure.  It is the biggest expenditure area amongst different policy area groups.

74. A quality teaching force is the key to the quality of education.  I propose to inject an additional $480 million into the HKSAR Government Scholarship Fund (GSF) to set up scholarships for outstanding local students to take degree courses or teacher training programmes in prestigious overseas universities.  I expect that about 20 scholarships will be awarded each year.  Students who receive the awards must undertake to teach in Hong Kong upon graduation for at least two years or a period equivalent to the duration of receiving the scholarships.

75. Hong Kong is an international city.  Our people should possess good language proficiency.  The Language Fund set up in 1994 provides financial support for projects and activities aimed at promoting bi-literacy and tri-lingualism among our people, including programmes to support non-Chinese speaking students in learning Chinese.  I propose to inject $5 billion into the Language Fund to facilitate its longer term planning.

76. In the 2011-12 academic year, nearly 500 students with special education needs (SEN) enrolled in local full-time accredited sub-degree and degree programmes.  As compared with their peers, students with SEN encounter more difficulties in learning and have to apply themselves more diligently.  I propose to make two separate injections of $20 million each, bringing the total to $40 million, into the GSF and Self-financing Post-secondary Education Fund to establish scholarships to give recognition to deserving tertiary students with SEN in the pursuit of academic and other excellence.  I expect that about 100 students will be awarded scholarships every year.  I also propose to allocate $12 million to the Vocational Training Council each year to purchase equipment and learning aids for students with SEN, providing them with psychological and student counselling services, and enhancing the support for teaching and learning.

Promoting Career Progression

77. Vocational and academic qualifications are equally important for personal development.  The Government launched the Qualifications Framework (QF) in 2008, embracing qualifications in the academic, vocational and continuing education sectors and establishing flexible learning pathways with multiple entry and exit points.  Industry Training Advisory Committees (ITACs) are set up under the QF to develop the Specifications of Competency Standards (SCSs), and to promote and implement the QF within the industry.  The QF also provides a platform to facilitate the development of diverse pathways for career progression, and practitioners can receive recognition at various levels based on their prior practice and experience.

78. To further enhance the knowledge and skills of workers in the industries, and their competitiveness in the labour market,I propose to allocate $10 million per year to support ITACs to launch new initiatives.  These include:

(a) introducing award schemes for outstanding practitioners to engage in learning activities in different places around the world;

(b) designing SCS-based training programmes and package that meet the needs of the industries; and

(c) stepping up promotion and publicity of the QF for its wider acceptance among all sectors.

So far, 19 industries have set up their ITACs, covering 46 per cent of the local workforce.

Enhancing Vocational Training

79. The sustained development of all sectors hinges on quality workers.  Some sectors, including the construction, retail and catering industries, have experienced labour shortage in recent years.  Members of these sectors have urged the Government to follow other countries' example and allow large-scale labour importation.  In my opinion, the shortage problem facing some sectors is caused by the surge in labour demand arising from their rapid development, coupled with the fact that a labour mismatch does exist in the labour market.

80. Hong Kong's economic growth has been driven by economic upgrading and restructuring for many decades.  We have a flexible labour market where the quality of labour keeps improving to meet the needs of a changing economic structure.  We should first consider how to provide more suitable training programmes and complementary measures to channel more workers to these sectors.  This is to make good use of local labour to enhance the productivity of the whole community.  No doubt, local workers should be given priority for quality employment opportunities in all sectors.  However, I understand that there may be transitional labour shortages for some jobs in certain sectors, or even longer-term shortages in a number of obnoxious trades.  The Government will follow its existing policy and mechanisms in dealing with labour importation.

81. A long-term labour shortage will hinder the development of industries, affect the employment market and even dampen our economic vibrancy.  We must find the right match between the industries and the workforce.  Trade associations and stakeholders of some industries have been forthcoming with proposals to improve training and labour supply for their respective industries.  A feasible option for attracting new blood into the industries is to develop structured training programmes that link up enrolment of trainees, vocational training, job attachment and job matching.  Such training programmes should be coupled with appropriate subsidies as incentives, and effective publicity.  These will allow more young people and their families to have a better understanding of the industries concerned.

82. Take the construction industry as an example.  The efforts on training made by the industry in recent years have begun to produce results.  The industry's co-ordinating body, the Construction Industry Council (CIC) has all along been striving to enhance training for the construction workforce.  I allocated a total of $320 million in 2010 and 2012 to support the CIC's labour training, which includes granting subsidies to contractors to employ trainees on a "first-hire-then-train" basis to enable them to gain actual work experience on construction sites.  Training allowances are provided for those trades facing labour shortages to attract new entrants.  More than 2 000 training places have been provided by the CIC so far, and about 60 per cent of the trainees are aged below 35.  We shall also step up our promotion efforts to attract ethnic minorities to join the industry.

83. Thanks to the systematic labour training provided by the CIC and the rollout of major infrastructure projects in the past decade, the employment situation of the construction industry has improved notably.  The unemployment rate dropped substantially from the post-financial tsunami 12.8 per cent to the latest 5.1 per cent, and the average median monthly income has increased steadily to $13,000.  Some of the trades have even seen an appreciable increase in the income of their workers.  I encourage other industries in keen demand for labour to follow the example of the construction industry in launching systematic training plans and initiatives to bring in more new recruits.

84. As elaborated by the Chief Executive in his Policy Address, further enhancing Hong Kong's status as an international shipping centre is one of the Government's priorities.  The shipping industry offers plenty of quality job opportunities with promising prospects.  The shipping companies registered in Hong Kong own and manage a total of about 2 000 merchant ships, which make up ten per cent of the world's merchant fleet.  There are about 700 shipping-related companies in Hong Kong, offering a wide range of services such as shipping management, agency, finance, legal services and arbitration, and a large number of jobs.  At present, the Hong Kong International Airport offers more than 60 000 jobs.

85. To support training for the local shipping and aviation industry, I propose to designate $100 million to establish a training fund for maritime and aviation transport, so as to sustain and expand various schemes and scholarships, and to implement other new initiatives.  This will help attract young people to enrol in related skills training and degree programmes and join the industry upon graduation, providing a wealth of vibrant and competitive talent for the industry.

86. The retail industry accounts for about four per cent of GDP and employs over 300 000 people.  While the robust development of tourism should mean more business opportunities, the retail industry suffers from an increasing shortage of labour, with the current vacancy rate standing at over three per cent.  Difficulties in retaining and recruiting quality people have an imminent impact on the service quality of the industry, and may adversely affect economic development.  To facilitate its healthy growth in the long term, I shall set up a task force on labour development in the retail industry.  Led by the Commerce and Economic Development Bureau, the task force will pool the efforts of the Government, the industry and relevant organisations.  It will study the economic outlook of the industry and its labour demand and supply.  The task force will complete its work within this year and put forward appropriate and concrete recommendations.

Funding the Employees Retraining Board

87. Over the years, the Employees Retraining Board (ERB) has strived to improve the employability of local workers.  Through a variety of courses under the Manpower Development Scheme, the ERB offers placement-tied courses for the unemployed and job seekers, and courses which assist employees to enhance their skills, making it easier for them to move up the job ladder in various trades.  In 2013-14, the ERB will offer 130 000 training places.  Resources have also been reserved to provide an additional 40 000 places to meet the demand from training providers for increasing or redeploying places.

88. Levy on employers of foreign domestic helpers is the major financial source of the ERB.  In his Policy Address, the Chief Executive announced the abolition of the levy.  We have to provide sustained and stable financial support for the ERB so that it can continue to enhance the productivity of local workers.  I propose to inject $15 billion into the ERB to provide it with long-term support.

(To be continued)

Ends/Wednesday, February 27, 2013
Issued at HKT 11:56


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