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Op-Ed

2012/06/26

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The transition from one Chief Executive to the next is an opportunity to think about the big picture and perhaps to adjust public policy and governance as well as ways that better serve our society. The Hong Kong General Chamber of Commerce is pleased to notethat CE-elect Leung Chun-ying has indeed presented a comprehensive plan of action, detailing his vision for boosting Hong Kong’s competitiveness, achieving sustainable growth and bringing prosperity and a higher standard of living to Hong Kong citizens. We largely share his concerns and agree on the majority of the priorities he has set.

In his election manifesto, Leung pointed out that “Continued economic development is the foundation of Hong Kong's prosperity, on which the livelihood of our citizens depends. There is no need for major reversal of policy. We only need an appropriately proactive government which seeks changes whilst maintaining overall stability.”  The Chamber sharesLeung’s vision to accelerate the pace of economic development and enhance social stability.

We are also pleased to hear that Leung recognizesthe Chamber’s important role as the voice of business.  We believe the business community in Hong Kong is a force for good; together with the people of Hong Kong we build prosperity and create jobs.  We understand that C Y Leungis happy to work in close partnership with the Chamber to enhance Hong Kong’s competitiveness and promote sustainable growth for the benefit of all citizens.

For a number of months, Chamber members deliberated on the business community’s agenda for the next five years. Many of the ideas raised are familiar ones, such as formulating a masterplan on the long-term use of urban land, reviewing the Mandatory Provident Fund to ensure a comfortable retirement for all,and breaking down bureaucratic silos to enhance cross-bureau coordination and cooperation.  As such, HKGCC supports the new Administration’s proposals to reorganize the Government Secretariat.

The focus of our policy recommendations for the new Administration is on competitiveness and sustainability.

Hong Kong’s success stems from the free economy, entrepreneurial enthusiasm supported and encouraged by good physical and institutional infrastructure and only the most necessary regulatory control.  We are highly dependent on our flexibility, agility and ability to react quickly to changes in the business environment.  In such circumstances, we need to ensure that we have the best possible regulations, and that we only regulate where necessary.

The Law Reform Commission has recently published a report advocating the introduction of class action.  The Chamber has strong reservations about this, as we believe the costs far outweigh the benefits.  There is no driving demand among either consumers or the business community as adequate avenues for pursuing claims already exist.  Overseas experience, notably in the U.S., and the earlier U.K. decision not to pursue a class action regime speak for themselves.  The new Administration should not regulate for the sake of regulating.

In the near term, our competitiveness and sustainability is directly threatened by the poor quality of our living environment.  People from all walks of life overwhelmingly agree that the new Administration should take bolder action to reduce roadside emissions, such as introducing interest-free loans to replace vehicles prior to an outright ban.

To reduce pollution, we need to get serious about changing our habits and taking responsibility for the waste we generate.  The Government needs to consider building green incinerators and eventually adopting a comprehensive waste management approach.

Hong Kong’s business environment is the envy of the world in many regards, and emulated by competitors who strive to duplicate what we have built over many decades. Incentives, deductions and government investments make their effective tax rate lower still, and we need to pay attention. The first step is to establish a Tax Policy Office that would provide strategic directions on what we need to do to remain competitive.

In addition to rethinking how much money the Government needs to take out of the economy each year, we also need to ponder our fiscal reserves, which along with various other funds hold more than two trillion taxpayer dollars. One option would be to establish a dedicated fund to finance future healthcare and public pension requirements.

Over the longer term, we need to think about preparing our society for the challenges ahead. In the areas of education, the new Administration should reflect on why so many local families prefer to send their children to private schools, and what can be done to raise the quality of publicly-funded education to levels that would make expensive alternatives less attractive.

Our children will inherit a rapidly-aging society, an imbalance between employment needs and talent, and challenges and opportunities ofcloser integration with the Mainland. Add to them issues such as healthcare financing, then the need for a comprehensive and clearly defined population policy becomes all the more evident. Yet, we need to ensure that our contribution to the Mainland’s future prosperity does not undermine Hong Kong’s international flavour.

The Chamber firmly believesour recommended actions will go a long way towards ensuring that Hong Kong remains the pre-eminent regional business and financial centre, an attractive place to live and work and an asset to the nation and the people.

 

HKGCC Chairman C K Chow

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