Budget Speech by the Financial Secretary (7)

East-meets-West Centre for International Cultural Exchange

126. Hong Kong's positioning as an East-meets-West centre for international cultural exchange has, for the first time, been included in national planning. This gives full recognition of Hong Kong's distinctive advantages as a cultural melting pot of East and West, including the world-class cultural resources in the West Kowloon Cultural District, our position as one of the three largest art markets in the world and the vast pool of outstanding talents from around the globe. The Government will continue to dedicate its efforts to promote our cultural development, including mapping out a Blueprint for Arts and Culture and Creative Industries Development, nurturing a diverse talent pool, enriching arts, cultural and creative content as well as upgrading cultural infrastructure, with a view to further enhancing the ecosystem for the relevant industries.

Arts and Culture

127. To further promote the exchange of culture and arts in the GBA, Hong Kong will serve as the host city for the GBA Culture and Arts Festival in 2024, offering high-quality cultural and performing arts programmes from the area. I will allocate $20 million for hosting the festival. It is expected that 5 000 Hong Kong and Mainland artists as well as other practitioners in the arts and cultural sector will participate in the festival, attracting an anticipated audience of 140 000 people. I also propose to provide a total of $135 million over five years, starting from the next financial year, to support performing arts groups and artists in Hong Kong in taking part in performances and productions in the GBA. It is anticipated that each year 1 000 Hong Kong artists will participate in these activities, with an audience of 40 000 from the GBA.

Creative Industries

128. The Government launched the CreateSmart Initiative (CSI) in 2009. As at end-September 2022, nearly $2.3 billion had been allocated under the CSI to sponsor the creative sector in organising about 650 projects in Hong Kong, the Mainland and overseas benefiting around 13 000 SMEs with the creation of nearly 30 000 jobs and over 80 000 nurturing opportunities.

129. I will inject an additional $500 million into the CSI to support the development of our creative industries, encourage more cross-sectoral and cross-genre collaboration on creative and cultural programmes, and promote the co-production of television variety programmes by local television stations with Mainland or Asian production teams to enhance the influence of Hong Kong's pop culture. The CSI will also provide funding support for the Hong Kong Design Centre and the HKTDC to implement flagship events and incubation programmes.

Development of the Agriculture and Fisheries Industry

130. The Government has attached importance to the local agriculture and fisheries industry and is committed to promoting its modernisation and sustainable development. We support the sector in the application of advanced technology and intensification of production, as well as helping it seize the opportunities arising from the GBA development.

131. In my last Budget, I proposed to make two separate injections of $500 million into the Sustainable Fisheries Development Fund and the Sustainable Agricultural Development Fund. Upon approval of this funding proposal by the Finance Committee of the LegCo in December last year, the Environment and Ecology Bureau (EEB) has proposed a number of enhancements to suitably expand the coverage of the funds and further streamline the application procedures taking into account the views of the industry. The Agriculture, Fisheries and Conservation Department (AFCD) has also set up a task force to strengthen the support for interested applicants.

132. Phase 1 of the Agricultural Park in Kwu Tung, set up with $830 million of Government funding, has commenced operation in phases since late 2022. The industry has been conducting a consultancy study on the building design guidelines for multi-storey livestock farms with financial support of the Government. On fisheries, the AFCD plans to designate four new fish culture zones this year, to provide an additional development area of about 600 hectares. Besides, several new deep sea cages with modern mariculture equipment will be provided in phases for renting to fisheries associations, to lower their start-up costs. Fishermen associations may also apply to the Sustainable Fisheries Development Fund for setting up and operating new deep sea cages to facilitate sustainable development in terms of intensification of production.

133. To promote the upgrading, transformation, modernisation and sustainable development of the agriculture and fisheries industry, the EEB will work hand in hand with the industry to formulate a blueprint for the sustainable development of agriculture and fisheries. This will help to raise the quality and value of local produce, as well as the productivity of the industry in the long run through an array of measures covering finance, infrastructure, land and technical support, etc.

Building Capacity

Talent Resources

134. Talents are the most important resources for growth. Hong Kong's future depends on the continuous and abundant supply of quality talents to meet market demands. While launching initiatives to "compete for talents", the Government's foremost task is still to proactively nurture and retain local talents. The Government will encourage diversified development through education and training to equip young people and practitioners of different sectors with the skills required for the future development of our industries and economy, and create opportunities and hope for our local talents, so as to motivate them to keep striving for a better future together in Hong Kong.

Financial Services

135. To further nurture Fintech talents, the Government will launch a Fintech internship scheme for post secondary students, under which subsidies will be provided to participating students in Hong Kong and the GBA. The scheme facilitates eligible students to acquire practical work experience in Fintech enterprises in Hong Kong or the wider GBA, and helps them develop an early interest in pursuing a career in Fintech after graduation, with a view to enlarging the local Fintech talent pool.

136. Since its launch in 2016, the Pilot Programme to Enhance Talent Training for the Insurance Sector and the Asset and Wealth Management Sector has been well received. We will extend the programme for three years to nurture more talents for the industry and enhance the professional competency of practitioners.

Maritime, Aviation and Logistics Industries

137. Since its launch in 2014, the Maritime and Aviation Training Fund (MATF) has benefited more than 15 000 students and practitioners, and supported the industries in their promotional and publicity work. I will inject $200 million into the MATF to support manpower training of the logistics industry, promote the development of high-end, high value-added and smart logistics, and encourage the industry to collaborate with tertiary institutions and professional organisations in attracting more young people to join the industry. In addition, we will launch a Maritime Services Traineeship Scheme this year to provide traineeship opportunities for young people who aspire to a career in maritime law, with a view to nurturing more home-grown maritime lawyers.

138. In order to attract more young people to join the aviation industry, the first-year training places of the GBA Youth Aviation Industry Internship Programme co-organised by the Hong Kong International Aviation Academy and Mainland institutions will be increased from 300 to 450 to meet the long-term manpower demand of the aviation industry in Hong Kong and the Mainland.

Innovation and Technology (I&T)

139. In recent years, the Government has been making dedicated efforts to foster among our youth an interest in I&T from an early age, enhance students' digital skills and innovative thinking, improve the atmosphere for their learning of information technology (IT), and expand the future supply of I&T talents. Since launching, the IT Innovation Lab in Secondary Schools Programme and the Knowing More About IT Programme have been well received. I will make an additional funding of $300 million to continue providing subsidies of up to $1 million for each publicly-funded secondary school in the next three academic years for organisation of IT-related extra-curricular activities.

Construction Industry

140. In order to meet the manpower requirement for future infrastructure development, we will work with tertiary institutions to offer a comprehensive study and career development pathway and launch a two-year pilot scheme to provide on-the-job training allowance to trainees who have enrolled in part-time construction-related degree programmes. It is estimated that a funding of about $100 million will be incurred. The Government will also earmark $7 million to partner with Hong Kong Institute of Construction to launch a two-year "First-hire-then-train" subsidy scheme, to provide on-the-job training allowance to trainees who have chosen to enrol in Construction Safety Officer courses.

Northern Metropolis and Kau Yi Chau Artificial Islands

141. As a new engine for the future development of Hong Kong, the Northern Metropolis serves as an important base for promoting the development of I&T industries, supporting Hong Kong in establishing a new industry pattern of "South-North dual engine (finance-innovation and technology)". It also facilitates high-quality economic co-operation between Hong Kong and the GBA, forging an important platform for Hong Kong to better integrate into the overall development of our country. Furthermore, more land resources will be released to provide more quality living space to the public.

142. In the 2022 Policy Address, the Chief Executive proposed to establish a Steering Committee on the Northern Metropolis and an Advisory Committee on the Northern Metropolis to strengthen the institutional governance for the development of the area. The latter is to be chaired by me. The Advisory Committee, with experts and stakeholders in the community, will tender advice and suggestions for taking forward the project. Meanwhile, the Government and relevant Mainland authorities have set up a task force to strengthen communication and collaboration on matters related to the development of the Northern Metropolis. In addition, the Government is making preparations for the establishment of a Northern Metropolis Co-ordination Office to take forward related work.

143. Apart from pressing ahead with projects already under construction in the Northern Metropolis, such as those in the large-scale New Development Areas (NDAs) in Kwu Tung North/Fanling North, Hung Shui Kiu/Ha Tsuen and Yuen Long South, we are, in parallel, taking forward the planning and engineering studies of other development projects. We will start off by commencing consultation in the second quarter on the development proposals and land use planning of San Tin Technopole, the flagship I&T project in the region covering 150 hectares of new land for I&T uses. On another front, the first three buildings of the Hong Kong-Shenzhen Innovation and Technology Park in the Lok Ma Chau Loop will be gradually completed from end-2024 onwards and the site formation works of the first batch of new land for I&T uses at San Tin Technopole will commence in the same year. The additional space made available will facilitate the recruitment of Mainland and overseas I&T enterprises to establish a presence in Hong Kong.

144. Providing around four million square metres of commercial gross floor area and about 200 000 jobs, the 1 000-hectare Kau Yi Chau Artificial Islands built by reclamation can expand the scope and capacity of the development of Hong Kong and support the development of the third central business district. The Government has put forth preliminary proposals on the scope of reclamation, land use, transport infrastructure network and financial arrangements regarding the artificial islands, and has commenced public engagement activities. Upon finalisation of a more detailed planning and design concept, the Government will contemplate appropriate financial arrangements for the artificial islands project, examine various financing options and their economic benefits, and explore the optimal package with the community.

Land Supply

145. The 2023-24 Land Sale Programme will cover a total of 12 residential sites. With this, together with railway property development, private development and redevelopment projects as well as the Urban Renewal Authority (URA)'s projects, the potential land supply for the whole year is expected to have a capacity of providing about 20 550 units, about 60 per cent more than the annual demand of 12 900 units projected in the Long Term Housing Strategy. The Land Sale Programme also includes 3 commercial sites and 3 industrial sites, capable of providing about 200 000 square metres of commercial floor area and 170 000 square metres of industrial floor area respectively.

146. The Government's effort to expedite land creation has yielded remarkable results. We will secure land of a scale nearly doubles that of the previous five-year period for the production of no less than 72 000 private housing units in the coming five years, and make the land available to the market through the Land Sale Programmes and railway property developments. Among such land, nearly 60 per cent comes from NDAs/New Town Extensions, and another 40 per cent from other districts under the Government Land Sale Programmes and railway property developments. The above projection has yet to take into account the supply from development projects undertaken by the URA and other private development projects.

Housing Supply

147. The Government has identified sufficient land for the provision of about 360 000 public housing units, around 20 per cent higher than the supply target in the Long Term Housing Strategy, which will be able to meet the demand for about 300 000 public housing units in the next ten years. However, as the supply of housing land is not evenly distributed across each year, and land creation takes time, there is still a shortage of land ready for public housing development in the short run. To fill the short-term gap of public housing supply in a timely manner and to improve the living conditions of people living in inadequate housing, the Government has identified eight sites for the construction of Light Public Housing.

148. On transitional housing, as at end-2022, about 7 000 units have been put into service. It is expected that about 14 000 additional units will be coming on stream in the next two years.

149. To promote public-private partnership, the Pilot Scheme on Private Developer Participation in Subsidised Housing Development announced in 2022 Policy Address encourages developers to build subsidised sale flats for eligible persons to buy at a specified discount rate from the market price. We are currently formulating the policy framework of the pilot scheme, details of which will be announced later this year.

150. For private housing, it is estimated that the completion of private residential units will average over 19 000 units annually in the five years from this year onwards. As at end-2022, the potential supply of first-hand private residential units for the next three to four years is expected to remain at a relatively high level of about 105 000 units.

Adjustments to the Computation of Stamp Duty

151. The current demand-side management measures for residential properties (commonly known as "harsh measures") will remain unchanged.

152. Last year, more than 90 per cent of buyers of residential properties were first-time buyers. Having considered that no adjustments have been made to the value bands of the ad valorem stamp duty payable for the sale and purchase or transfer of residential and non-residential properties (Rates at Scale 2) since 2010, I have decided to make adjustments in this regard, with a view to easing the burden on ordinary families of purchasing their first residential properties, particularly small and medium residential units. Details of which are set out in the supplement to the Budget. Such adjustments shall take immediate effect under a Public Revenue Protection Order published in the Gazette today. It is anticipated that this measure will benefit 37 000 buyers and cost the Government approximately $1.9 billion per year.

(To be continued.)

Ends/Wednesday, February 22, 2023
Issued at HKT 12:30