Cleaning Our Regulatory House
Here in Hong Kong we like to think we are pretty competitive. For the most part we are. Our speed and efficiency is the envy of many countries around the world. Our low and simple tax regime has also been the benchmark which many economies aspire to.
Yet we need to keep our wits about us, because it is very easy to become complacent and let others overtake us. We saw this in the latest World Bank’s ease of doing business rankings released at the end of last year, as Hong Kong slipped a notch to fifth place. Many factors contributed to such results, some of which are self-inflicted Achilles’ heels that we really must address.
In the Chamber’s “Budget Proposals for 2018-19,” submitted to the Financial Secretary in January, we presented a whole range of ideas to strengthen the business environment, help companies and boost Hong Kong’s overall competitiveness.
Chief among our proposals is our recommendation for the Government to form a working party to review outdated legislation. Some of the anachronistic regulations that companies have to comply with today date back to a time before many of the complexities of today’s business world were even imagined.
For example, regulations impeding e-commerce in Hong Kong, building regulations, fire codes and so on, were enacted out of well-meaning intentions, but have not been updated in line with a rapidly changing world.
This is why we have proposed that the Government set up a working party to oversee the work of evaluating Hong Kong laws as a matter of priority. Members from the private sector should also be involved in the working party to assist in fulfilling its mandate.
As part of this, we have proposed that the Government refer to the U.K.’s approach, which applies regulatory impact assessments (RIAs) to improve policymaking and reduce the costs to business. By applying the RIA process, the Government will itself be more efficient and able to achieve the five principles of good regulation: transparency, proportionality, targeting, consistency and accountability.
We truly believe that adopting an evidence-based, cost-benefit approach to the evaluation of new and existing legislation would have a huge impact on easing the time, cost and frustration that businesses have to endure with outdated regulations.
While providing relief to Hong Kong companies, particularly SMEs, having a lean regulatory environment would also increase our efficiency and competitiveness, and at the same time increase our appeal as the best place in Asia to do business.
I am not saying that the Chamber is against legislation -- quite the contrary, as legislation can safeguard the public, promote prosperity and protect the environment. What the business community is against, however, is outdated, overly cumbersome and poorly thought out legislation that creates layers of costs and inefficiencies that ultimately retard Hong Kong and society’s development.
Posted on 2018/01/10