*****************************************************
Following is the speech by the Secretary for Labour and Welfare, Mr Matthew Cheung Kin-chung, at the Aon Hewitt & Radford Annual Rewards Conference today (October 29):
Mr Kelvin Lam (Managing Director, Aon Hewitt Hong Kong), distinguished guests, ladies and gentlemen,
It gives me great pleasure to address this high-level audience and meet so many senior executives and human resources experts from leading corporations and enterprises in Hong Kong.
In a world increasingly propelled by knowledge and innovation, human talent has become one of the most valuable and much sought-after assets for any corporation and economy. That is why gathering and stimulating thoughts on how to attract and, indeed, reward talents is a most timely, practical and crucial issue for discussion and cross-fertilisation.
This is, indeed, also a topic that bears much relevance to Hong Kong. As a city with very little natural resources, Hong Kong's continuous success and long-term competitiveness depend on our people - our single most valuable asset. I would therefore like to take this opportunity to salute our unsung heroes in the field of human resources. By luring global talents and grooming local recruits and employees, incentivising them for better performance as well as equipping and retaining them for sustainable corporate development, you have played an important and strategic role in fuelling Hong Kong's economic development and maintaining our competitive edge as Asia's world city.
As a matter of fact, the double demographic challenges of an ageing population on one hand and a shrinking labour force on the other also make it imperative for Hong Kong to devise robust human capital strategies for our economy so that we can continue to be vibrant and competitive. Sitting on our hands is a non-option. And to stand still is to stagnate.
The world is rapidly greying and Hong Kong is no exception. Like many developed economies elsewhere, Hong Kong is at the threshold of a large demographic shift as the post-war generation of baby boomers starts to retire. Improvements in health and shrinking fertility rates also add to our rapidly ageing population. The life expectancy at birth in Hong Kong is currently 81.2 years for males and 86.9 years for females, almost the highest in the world. According to the latest population projections released by the Census and Statistics Department about a month ago, these figures will rise to 87 years for males and 92.5 years for females by 2064 in 50 years' time. There were 1 065 300 people aged 65 or above in Hong Kong, meaning one out of seven Hong Kong residents is a senior citizen. These figures will rise to a staggering 2 525 000 in 2044 and 2 582 000 in 2064, translating into a ratio of one in three. The ageing trend is also revealed by the increasing median age of our population, which will jump from 43.7 in 2014 to 53.5 in 2064 (excluding foreign domestic helpers).
Based on the updated labour force projections, the total labour force (excluding foreign domestic helpers) is projected to increase slightly from 3.60 million in 2014 to 3.65 million in 2018, and then taper off to 3.43 million in 2031. The labour force is then projected to hover between 3.42 million and 3.43 million until 2038, before dwindling to 3.11 million in 2064. The overall labour force participation rate (i.e. the proportion of the labour force in the population aged 15 and over) is projected to fall from 59.3 per cent in 2014 to 48.6 per cent in 2064. These are rather stark statistics and constitute an effective wake-up call for policymakers and human resources practitioners alike. There is simply no room for inaction, let alone complacency.
To ensure that this vibrant city continues to forge ahead and remain competitive as an international financial and business centre, in the face of the two-pronged demographic challenges the Hong Kong Special Administrative Region (SAR) Government has put at the top of its policy agenda the tasks of nurturing local talent and making the best and full use of our own people. This is where education comes into play. Of course, to replenish our local workforce and to ease sectoral bottlenecks in local labour supply, we need to suitably bring in expertise and experience from outside Hong Kong. This will enhance our competitiveness and maintain our international complexion. For obvious reasons, we need to continue to open our doors to foreign talents and skilled labour as appropriate whilst according priority of employment for local citizens.
In this financial year (2015-16), spending on education alone accounts for a significant 22 per cent ($71.4 billion) of the Hong Kong SAR Government's annual recurrent expenditure - the lion's share of all policy areas. This covers academic studies, vocational education and training, skills upgrading and lifelong learning.
To build a system whereby young people of different interests, backgrounds and talents can thrive and realise their potential to the full, we have put much emphasis on teaching life-learning in schools and at the community level. We are working to promote a culture whereby both vocational education and academic education would be seen by students, parents and employers as equally promising paths to a prosperous future for young people. We have also announced the establishment of a $1 billion fund to provide long-term support for the development of the Qualifications Framework, which seeks to promote lifelong learning and skills upgrading. To enhance the employability and overall competitiveness of different sectors of the local workforce, the Government injected $15 billion into the Employees Retraining Fund in early 2014 to finance the long-term operation of the Employees Retraining Board (ERB). All these speak volumes about our commitment to nurture local talent and provide opportunities for upward social mobility.
The current-term Government has also mapped out a holistic, comprehensive and visionary population policy. Our 50 policy initiatives cover the main areas of promoting sustainable growth, unleashing the potential of the local workforce, enhancing the quality of home-grown talent, attracting foreign investors and talent, fostering a family-friendly environment and embracing opportunities in an ageing society. We will leave no stone unturned in facilitating, enabling and attracting women, the "young old", new arrivals, ethnic minorities and persons with disability to join or rejoin the workforce. We invite all our human resources experts to join hands with us to build a versatile and diverse workforce for Hong Kong.
Everywhere around the world, economies, corporations and organisations are vying for the best of talents. Besides offering attractive rewards, an important pull factor for drawing and retaining these talents is to provide an employee-friendly culture whereby all statutory labour rights are keenly observed.
The Government attaches great importance to safeguarding the statutory labour rights and ensuring the occupational safety of Hong Kong's workforce. Our policy is to improve employees' protection progressively at a pace commensurate with the socio-economic development of Hong Kong and, more importantly, strike a reasonable balance between the affordability of employers and the interests of employees.
For example, to promote family-friendly employment arrangements in ways reasonable to employers, especially those operating small and medium-sized enterprises, the Government has introduced the statutory paternity leave since February 27 this year. Specifically, male employees with a child are entitled to three days' paternity leave to be taken consecutively or separately. Employees who are qualified for paternity leave pay may receive a daily rate of four-fifths of their average wages as paternity leave pay.
Let me conclude by making one further but important point. Whilst government spending on social welfare has been rising steadily in recent years and will hit a hefty $59.6 billion in 2015-16, representing 18.4 per cent of the Government's annual recurrent expenditure and just after education, let me stress that Hong Kong will not go down the route of a welfare city. It is true that the current-term Government is determined to tackle poverty and enhance elderly care in preparation for a fast ageing society. It is also true that we believe that Hong Kong should and can do more to build a caring, compassionate and fair society. But we will not go down the slippery path of populism. We will adhere to our well-tried and cardinal philosophy that limited public resources must be targeted at helping the most needy in our society. We will strike an appropriate balance between responsiveness to community needs and responsibility for prudent public spending.
On this note, let me wish all of you a stimulating and fruitful discussion today. I hope you will all come away much wiser. Thank you.
Ends/Thursday, October 29, 2015
Issued at HKT 11:10
NNNN