October 10, 2001

TANGIBLE BENEFITS MIXED WITH CONFIDENCE BUILDING

Chief Executive's Policy Address seeks to maintain "steadfast course"
while recognising prospect of "drawn-out economic hardship"

The Hong Kong General Chamber of Commerce (HKGCC) feels that, within the constraints imposed by the global economic climate and the Government's own budget situation, our Chief Executive was able to offer some important new initiatives for business and individuals, as well as some welcome temporary relief to those most hard hit by the economic downturn  ---   while at the same time charging all of us to be forward looking.

HKGCC appreciates the difficulties many Hong Kong residents face currently, but feels that the Chief Executive has done all he can in terms of temporary measures --- which include new job creation, the reduction in rates for all ratepayers, and the increase in the tax deduction ceiling for mortgage interest benefits to $150,000 over this and the next tax year, because they have to be viewed in the context of the wider political, economic and fiscal situation.

HKGCC Chairman, Mr Christopher Cheng, noted with satisfaction that the five priority tasks outlined by the Chief Executive had all been canvassed in the Chamber's own submission to Mr Tung back in August this year.

These included improvements in education (including tri-lingualism), development of soft and hard infrastructure to improve Hong Kong's positioning, improving the environment, relieving the hardship of the less-privileged and, importantly, structural reforms within Government.

"The Chief Executive's Policy Address this year targeted the issues we thought were important for the local economy, " Mr. Cheng said. "While we might debate the level of emphasis given each, or the scope of actions taken, the general direction is on the right track. I was personally pleased to hear more details of the Administration's thinking on the measures to improve Government accountability, including the appointment of the three top officials as well as the new equivalents of Policy Secretaries."

He said: "Like the Chief Executive, the Chamber believes such a new system will not only improve responsibility, but also enable Government to prioritise projects, lead to better co-ordination between departments and enable them to respond more quickly to public demands. I would have liked to hear more about general civil service reform, although I welcome the Chief Executive's commitment to smaller government and reducing government spending as a share of total economic output. I hope that the accountability ideas expressed today can be implemented sooner rather than later.

Mr Cheng said the continued emphasis on education in this year's address was especially important if Hong Kong is to be able to offer its young people the best opportunities available, stay ahead in the new "knowledge economy" and enhance its competitive position in the global market place.

"Mr Tung's commitments to raise general education standards, increase the number of post secondary places and pursue life-long learning were all important," Mr Cheng said.

"We in the business community also especially welcomed the commitment to tri-lingualism, emphasising the importance of proficiency in Cantonese, Putonghua, and English.

"We agree totally with the Chief Executive's emphasis on economic restructuring and the need for Hong Kong to encourage knowledge economy, higher value-added economic activities and the opportunities to come from the Mainland's WTO entry. We totally agree with Mr. Tung's statement that at the end of the day, human capital is what Hong Kong must develop." he said.

"We welcome the $600 million in additional funding for small and medium enterprises, the creation of new job opportunities in specific sectors of the economy and improvements in the living environment, including co-operation with Guangdong to improve air quality. The infrastructural projects should improve Hong Kong's positioning and create jobs at the same time.

"The emphasis on tourism is also important, including the agreement with the mainland to abolish the quota system for group tours from January 1 next year," he said. "The new $300 million Community Investment and Inclusion Fund is also an innovative step."

Finally, the HKGCC is very pleased that the multiple visa easing for Hong Kong permanent residents with foreign passports is finally happening, after HKGCC has spearheaded this effort for the last two years.

All in all, the HKGCC felt that the Policy Address met the challenge of balancing addressing the community's immediate needs with initiatives to strengthen Hong Kong's positioning, all in a very difficult economic environment.

For inquiries, please contact Dr Eden Woon on 2823-1211.