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Budget Speech by the Financial Secretary (7)

Fostering Talent

108. There is keen competition among economies under the "new economic order".  For Hong Kong to stay competitive, we need to have a pool of talents familiar with innovation and technology and equipped with professional skills.  The talents must have broad horizons and a solid grasp of international affairs, so that they can contribute towards the diversified development of Hong Kong as a knowledge-based economy and help open up new markets.

109. Education has long been a major area of recurrent government expenditure.  Expenditure on education for 2016-17 is $75 billion, accounting for 21.5 per cent of recurrent government expenditure.  It represents an increase of 70 per cent over ten years.

110. With good basic education in general, the generations born in the 1980s and the 1990s have become the lifeblood of different sectors.  Government will continue to invest heavily in nurturing talents.  Apart from our ongoing efforts to enhance the quality of education, we shall also offer more internship and exchange opportunities to students and encourage the workforce to pursue continuing education, developing a good mix of generalists and professionals in Hong Kong.  This will help our new generations maintain their competitive edge and realise their potential under the "new economic order".

Internship and Exchange

111. In October last year, I launched the Enriched IT Programme in Secondary Schools, which offers intensive training to students with potential.  We have set up a steering committee to coordinate and promote the programme.  Members of the steering committee include IBM, Google, Microsoft and Huawei.  In the next two years, we shall continue to collaborate with the industry to organise activities and internship programmes, with a view to nurturing IT professionals for the development of Hong Kong.

112. We shall increase the monthly allowances of the Internship Programme under ITF and extend the programme to cover the incubatees and SME tenants of the Cyberport and the Science Park, as well as the start-ups to be funded by the Innovation and Technology Venture Fund, in a bid to encourage more university graduates to enter the field of innovation and technology.

113. Last year, the Hong Kong United Youth Association and Y Society organised the first Future Leaders in Finance Internship Programme, a summer internship, supporting 20 local university students to work as interns at financial institutions in Beijing to broaden their networks and horizons.  Government will provide subsidies and increase the internship places to 40 this year.  Partners to the programme include the China Investment Corporation and the Silk Road Fund.

114. The Scheme for Cross-boundary Study Tour for Post-secondary Financial Talents, which we jointly launched with Shanghai in 2012, enables Hong Kong students to understand the prospects and dynamics of the financial markets in the Mainland.  Government will subsidise 30 local university students to join the scheme this year.

115. The ASEAN Internship Scheme launched by the Hong Kong Economic and Trade Office in Singapore in 2014 has so far provided internship opportunities for about 300 students.  Through this scheme, students can gain first-hand knowledge about the economic and socio-cultural environments of the ASEAN countries.  From 2016 onwards, the scheme will be extended to cover the Hong Kong Academy for Performing Arts, Hong Kong Shue Yan University and Hang Seng Management College, bringing the total number of participating tertiary institutions to 11.

Professional Training

116. Government is committed to nurturing professionals to meet our needs.  Since this academic year, we have launched a subsidy scheme of $960 million for students pursuing self-financing undergraduate programmes in selected disciplines, including healthcare, architecture and engineering, testing and certification, creative industries, logistics as well as tourism and hospitality.

117. To further encourage continuing education, I shall implement a pilot scheme to provide tuition fee subsidy for three cohorts of students admitted to designated professional part-time programmes offered by the Vocational Training Council starting from the next academic year.  Programmes in the disciplines of construction, engineering and technology will be covered.  The total commitment will be $200 million, benefiting 5 600 people.

118. As for the construction industry, we have allocated a total of $420 million over the past six years to support the Construction Industry Council in enhancing its training and promotion efforts to attract more new entrants to the industry.  As at 2015, 18 000 semi-skilled workers have completed their training.  Government will continue to collaborate with the industry in upgrading practitioners' skills, putting in place a clear career ladder, improving the working environment, and ultimately increasing the manpower for the industry.

119. The Earn and Learn Pilot Scheme for the Retail Industry has been implemented since 2014 to subsidise practitioners to enrol in diploma programmes and receive on-the-job training at the same time.  Joined by 50 retail brands, the scheme has been well-received by the industry.  It is expected that 1 500 practitioners will be trained.  With recognition under the Qualifications Framework, the scheme will raise professional standards and show a clear career path for participants, contributing to the sustainable development of the retail industry.

120. Manpower shortage in the financial services industry is particularly pronounced in the insurance sector and the asset and wealth management sector.  Last year, I proposed to allocate $100 million to take forward a three-year pilot programme.  Starting from the latter half of this year, we shall provide financial subsidies to practitioners to attend training courses to enhance their professional knowledge and competency.  To attract more new blood to the financial services industry, we shall also offer university students internship opportunities to enhance their understanding of the job nature and career prospects of the sectors.
Land Resources

121. Land is an indispensable element for sustainable economic and social development.  Government will continue to increase land supply to meet Hong Kong's needs in terms of housing, economic and social development for maintaining our long-term competitiveness.

Residential Land

122. For public housing, based on the latest projection, Government has adopted the public housing supply target of 280 000 units for the ten-year period from 2016-17 to 2025-26.

123. The Hong Kong Housing Authority (HKHA) requires substantial resources to implement the ten-year public housing construction programme.  It is estimated that HKHA's cash and investment balance will drop to $16 billion by the end of March 2020.  I have set aside the investment returns of $45 billion in 2015 as an injection into the Housing Reserve.  Taking this injection together with the 2014 allocation and accumulated investment returns, the balance of the Housing Reserve now stands at $74 billion.  When Government and HKHA have reached consensus on the necessary government financial support arrangements, we shall seek approval from the Finance Committee for funding to be drawn from the Housing Reserve to support the long-term public housing development.

124. As for private housing, Government estimates that private housing land supply in 2015-16 has a capacity to produce over 20 000 units.  The 2016-17 Land Sale Programme comprises 29 residential sites, including 14 new sites, capable of providing about 19 000 units.  Taking into account railway property development projects, the Urban Renewal Authority's projects and private redevelopment and development projects, we estimate that the potential land supply for private housing in 2016-17 will have a capacity to produce 29 000 units.  The Secretary for Development will announce tomorrow the Land Sale Programme for the next financial year.

125. Amid the increase in land supply over the recent past and the market expectation of US interest rate hikes, the property market has showed signs of correction since the middle of last year.  Trading in the residential property market has turned quieter, and property prices have been falling for four consecutive months since last October, with a cumulative drop of nine per cent as at January 2016.  There will be successive rises in interest rates, and the medium-term supply of local residential flats will increase.  All these factors, coupled with various uncertainties overshadowing the economic outlook, could add pressure to further property market correction.  The public should carefully assess the potential risks, in particular the impact of interest rate hikes on their home mortgages, and their own financial position when making a home purchase decision.

Commercial Land

126. In 2015-16, Government put up for sale a total of three business sites, capable of providing 68 000 square metres of floor area.  The Land Sale Programme for the coming financial year includes eight commercial/business sites and three hotel sites, capable of providing 540 000 square metres of floor area and 2 100 hotel rooms respectively.

127. Government will continue to increase the supply of commercial floor area through various channels.  Apart from putting on sale the Trade and Industry Department Tower in Mong Kok and implementing the relocation plan of the three government office buildings in Wan Chai by phases, we shall also íV

(a) reprovision government facilities in the two action areas in Kwun Tong and Kowloon Bay, and the land released is expected to provide 560 000 square metres of commercial and office floor area;

(b) convert the Murray Road multi-storey car park to commercial use, which is estimated to provide 42 000 square metres of floor area; and

(c) redevelop the Queensway Plaza site, which is capable of providing 93 000 square metres of floor area.

(To be continued.)

Ends/Wednesday, February 24, 2016
Issued at HKT 12:06


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