Policy Statement & Submission

Red tape and over-regulation

• Business licenses. Now that the business licenses have been centralised, it is time to examine the need for the business license themselves. The licenses which are redundant should be abolished.

• Government forms. These vary greatly in format and the type of information required. They should be comprehensively reviewed with the view to simplifying the format, limiting only to essential information, and making them more user-friendly.

• Application procedure for government funds. There are many government funding schemes. The application procedure is often very cumbersome and the approval process is tailored to the convenience of the administrators rather than the proponents. They need to be re-examined and relaxed. For example, cross-funding options should be available (i.e. the same project being funded by a combination of several funding schemes).

• Land-use. The scope of the Short Term Wavier on the agriculture land for industrial use is very narrow, often limited to one specific use approved after a cumbersome planning application process ¡V Planning Section 16 plus negotiation with Lands Department. Any change in use, even to a related one, would mean going through the same process again, with the result that a long list of conditions will have to be fulfilled, which are often difficult and costly. For businesses in the northern part of the New Territories, the result is either not revealing detailed information to Lands Department, or closing down and moving away from Hong Kong.

Reducing cost

• Fees and charges. There should be more transparency of the fees and charges imposed by government, e.g. on the efficiency of their collection and deployment, and whether there is any room for reduction.

• Government rent. When government land is involved (e.g. necessitated by the irregular shape of the land lots), the implementation of short term wavier for industrial use in the New Territories will necessitate negotiation with the government over a short term tenancy. However, the appraisal system used by Lands Department often results in very high charges for the short term tenancy, as they sometimes use methods which may be deemed questionable (e.g. using land already leased as basis instead of the current market situation of industrial buildings. If the land owner objects, he must hire a surveyor to argue with the Lands Department, which can be very costly and time consuming. Rather than leave this to case-by-case negotiation, the appraisal system itself should be reviewed to ensure that it is not unfairly prejudicing against users.

Transfering public services to the private sector

• Competition. The government and quangos (quasi-governmental organisations) have been growing in the past 15 years and progressively taking business away from the private sector. The BAG should assist the private sector to re-gain business from the public sector.

• Privatisation. There should be a review of government expenditures on public sector education institutions and clinics, dental and hospital systems. The aim should be to save resources (e.g. by closing down over-capacity or non-performing institutions) and to use them to encourage the growth of corresponding organisations in the private sector, i.e. private schools, universities and medical institutions.

Improve existing services and introducing new services

• Government tenders. One constant source of complaint from SMEs relates to the participation in government contracts. Government practices on tendering, including design, selection and award, should be re-examined.

• Funding schemes. The scope of the government funding schemes are too narrow and specific, and there is little flexibility. The result is that many good ideas may not be supported because they do not exactly fit the rigid application procedures. Besides their operation, the effectiveness of these funding schemes themselves should be re-examined. There should be a mechanism to allow project proposals to be funded if these proposals represent good ideas but they do not fall strictly into existing categories of funds.

• Public works. Public works projects often cause disruption to businesses and retail shops nearby. Some of the disruption could be quite serious, e.g. railway extension works in Tsim Sha Tsui. There should be a system in controlling as well as mitigating the impact.

• Public announcements. Transparency in government announcements and notices that affect the business sector should be improved. Other than in a few newspapers, government should proactively seek to post business-related notices in relevant medium, such as trade association journals, so as to reach the right audience more effectively.

• No comment.

• Overall review. With the current and projected budget deficits it is not enough to streamline government procedures. Only those procedures that "add value" or involve basic health and safety should be maintained. A radical review is required to eliminate unnecessary procedures.

• Legislation. Thus far the BAG has concentrated on government operations. It should extend its role also to examining the source of inefficiencies, e.g. reviewing the legislation affecting businesses, identify problematic ones and seek to update them to make them more business-friendly.

• Regulatory impact assessment. There should be a mechanism for conducting regulatory impact assessment for major legislation affecting business. Currently this may be done on ad hoc basis but the case for a consistent policy should be examined.

• Facilitating business. The BAG can extend the "helping business" concept to "facilitating business", by supporting the development of businesses which add value to Hong Kong economy. This can be implemented by extending the "departmental business study"concept to a few business sectors such as those involving value-creation and innovation, e.g. environmental services, digital entertainment, education services, design, etc.

• A secretariat which is a "listening office" not a defensive government department.

• Government should set up more liaison offices in more cities in the Mainland. These offices should have first-hand contact with enterprises doing business in the Mainland and hence be able to assist them in tackling the obstacles and regulatory problems in China.