Budget Speech by the Financial Secretary (9)

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Capacity Building

144. Land and manpower are two major constraints on our economic growth. To drive the diversified development of a knowledge-based economy and open up new markets, we need to attract talents with vision, cross-cultural competence and a firm grasp of international affairs. The Government has been investing heavily in education to nurture talent for the sustainable socio-economic development of Hong Kong.

Human Capital

Whole-person Education

145. Between 2012-13 and 2017-18, recurrent expenditure on education has recorded a cumulative growth of nearly 30 per cent to $78.6 billion, accounting for 21 per cent of government recurrent expenditure, with an average annual growth of about 5.4 per cent. This demonstrates the great importance the Government attaches to investing in education and our long-term commitment to this area.

146. The Government will implement the free quality kindergarten education policy from the 2017/18 school year to replace the Pre-primary Education Voucher Scheme launched in the 2007/08 school year. The Government's financial commitment to pre-primary education will increase substantially by about $2.7 billion annually.

147. VPET broadens the learning opportunities for secondary school leavers and in-service personnel, and nurtures the requisite human capital for various sectors. The Government has allocated $288 million to the Vocational Training Council (VTC) to launch a pilot scheme which integrates structured apprenticeship training programmes with on-the-job training since the 2014/15 academic year. The scheme aims to attract and retain talent for industries with keen demand for labour, and will benefit four cohorts of 4 000 trainees in total. In addition, the Government has allocated $200 million to the VTC to implement the Pilot Subsidy Scheme for Students of Professional Part-time Programmes from the 2016/17 academic year, covering programmes in the disciplines of construction, engineering and technology. The scheme is expected to benefit three cohorts of about 5 600 students in total.

148. In order to nurture talent to meet our social and economic needs, the Government has decided to regularise the Study Subsidy Scheme for Designated Professions/Sectors from the 2018/19 academic year to subsidise students to undertake designated self-financing undergraduate programmes. The number of subsidised places will increase from about 1 000 per cohort to 3 000. Current students of the designated programmes will also receive the subsidy from the 2018/19 academic year. It is expected that about 13 000 students will benefit from the scheme each academic year, involving an expenditure of about $850 million per year.

149. Furthermore, the Government has established the $1 billion Qualifications Framework (QF) Fund to promote the development and implementation of QF, with a view to continuously enhancing the overall quality and competitiveness of the local workforce. We are actively pursuing opportunities for co-operation with other countries or places in the development of QF. The Education Bureau is conducting comparability study of QFs with relevant authorities in New Zealand, Scotland and Ireland. Such international co-operation can facilitate mutual recognition of qualifications and enhance the mobility of our workforce.

Continuing Education

150. The Continuing Education Fund (CEF) subsidises adults with learning aspirations to pursue continuing education and training. So far, injections into the CEF have totalled $6.2 billion. I propose to inject an additional $1.5 billion into the CEF in 2017-18. We will also consider various measures to enhance the operation of the CEF. In addition, we will raise the tax deduction ceiling for self-education expenses from $80,000 to $100,000, with a view to promoting life-long learning and maintaining a quality workforce.

Youth Development

151. To nurture young people as future leaders with vision, creativity, leadership and a sense of commitment, we have been actively advocating a culture of multi-faceted excellence and providing additional resources to implement various youth development initiatives in recent years. In 2017-18, I will inject $200 million into the Multi-faceted Excellence Scholarship to support local students who excel in areas other than academic performance, for example sports, arts or community services, to pursue undergraduate studies, in a bid to promote multi-faceted excellence. I will also allocate an additional $100 million to expand the International Youth Exchange Programme so as to encourage young people to increase their global exposure and broaden their international horizons.

Land Resources

152. Increasing land and housing supply is one of the priorities of the Government. Our work not only involves the technical process of land identification and development, but also the balancing of various needs and expectations of stakeholders. This is not an easy task. On the one hand, the Government has to continue its endeavour to increase land supply on all fronts to meet the housing, economic and social development needs of Hong Kong. On the other hand, it is necessary for us to build up a land reserve to meet future demand in a timely manner.

Housing Land

153. On housing land, as at end 2016, the projected supply from the first-hand private residential property market in the next three to four years will be approximately 94 000 units, a record high since the first release of quarterly supply statistics in September 2004. Based on the preliminary assessment of private residential developments known to have started or to be started on disposed sites, the private sector will, on average, produce about 20 300 private residential units each year in the next five years, representing an increase of about 70 per cent over the yearly average in the past five years. As regards public housing supply, for the five-year period from 2016-17 to 2020-21, estimated public housing production by the Hong Kong Housing Authority and the Hong Kong Housing Society will be about 94 500 units, including about 71 800 public rental housing units and about 22 600 subsidised sale flats.

154. The 2017-18 Land Sale Programme comprises a total of 28 residential sites, including 20 new sites, capable of providing about 19 000 residential units. Taking into account railway property development projects, the URA's projects and private redevelopment and development projects, we estimate that the potential land supply for private housing in 2017-18 will have a capacity to produce about 32 000 units. The Secretary for Development will announce tomorrow the Land Sale Programme for the next financial year.

155. To achieve the ten-year housing supply target, we must address the shortfall in land supply for public housing development. Through the Steering Committee on Land Supply, I will co-ordinate and supervise the work on land supply with a view to narrowing the difference as soon as possible in order that applicants who are waiting for public rental housing can be housed earlier. Once again, I call on the relevant District Councils, local communities and LegCo members to support the rezoning of various sites for housing use in the overall interests of the community, so that people who are yearning for a residential flat can secure one at the earliest possible time.

Commercial/Industrial Land

156. To maintain Hong Kong's status as an international financial centre, we have to ensure a continued supply of office space, especially Grade A office space. At the same time, we need to provide space which is more flexible and affordable for industrial and commercial operation, to facilitate the development of different trades in Hong Kong.

157. The Government will continue to increase land supply for different economic activities through various measures in order to sustain our competitiveness. From 2012-13 to 2016-17, a total of 23 sites for commercial/industrial use have been sold/will be put up for sale, capable of providing about 1.02 million square metres of floor area, representing an increase of about 1.8 times compared with the previous five years. In the same period, the Government sold three hotel sites, capable of providing some 1 900 hotel rooms.

158. The Land Sale Programme for the coming financial year includes three commercial/business sites and one hotel site, capable of providing about 172 000 square metres of floor area and some 550 hotel rooms respectively.

159. The Government will continue to increase the supply of commercial floor area through various means. Apart from approximately 560 000 square metres of commercial/office floor area to be released through reprovisioning the existing government facilities in the two action areas in Kwun Tong and Kowloon Bay, a number of large commercial sites will be made available to the market in the next few years. They include the Queensway Plaza site, the site on top of the terminus of the Guangzhou-Shenzhen-Hong Kong Express Rail Link (Hong Kong Section), Site 3 of the new Central Harbourfront, the Caroline Hill Road site, the Sai Yee Street site and various sites in Kai Tak, capable of providing a total of about 1.1 million square metres of floor area.

Long-term Development

160. While carrying out large-scale new land development and building up a land reserve, we need to formulate a comprehensive development strategy for meeting various challenges, especially those posed by our ageing population, ageing building stock and a shrinking workforce. The Development Bureau and the Planning Department are conducting public engagement for "Hong Kong 2030+: Towards a Planning Vision and Strategy Transcending 2030" ("Hong Kong 2030+"), which has put forward a number of policy directives and recommendations. The aim is to formulate long-term planning for Hong Kong's sustainable development and create sufficient development and environment capacity for meeting future land resources demand and conserving our natural assets. The public engagement exercise of "Hong Kong 2030+" will last until the end of April this year. I hope all sectors of the community will contribute to this exercise and offer your valuable views with empathy and with a view to forging a consensus for the betterment of Hong Kong.

(To be continued.)

Ends/Wednesday, February 22, 2017
Issued at HKT 12:40

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