The current-term administration will govern with compassion and take a bolder approach in investing in Hong Kong’s future.
Chief Executive Carrie Lam made the statement on the radio today when elaborating on her 2017 Policy Address.
Mrs Lam’s maiden policy speech outlined more than 250 new initiatives.
Taking questions from listeners, she addressed concern over short-term measures implemented by previous Governments, giving assurance her administration will tackle long-standing issues by tapping into its substantial fiscal reserves.
“My fiscal philosophy is such that we are now sitting on a reserve of over $1,000 billion which is adequate to look after the Government for two years without any income. So this is really the time to take a bolder approach in two things. One is to invest in Hong Kong, whether it’s infrastructure, education, or other things. The other is to help solve some fundamental long-outstanding problems, like waiting time for rehabilitation services (for) the young kids with developmental needs or elderly community healthcare and so on,” she said.
The Chief Executive stated one of the most difficult issues she faces is gaining a consensus on how to boost land supply to address the public’s pressing need for housing.
“I now introduced some innovative thinking on rebuilding the housing ladder and other things. But at the end of the day we need land before I could fully meet the people’s aspirations.”
In her Policy Address, Mrs Lam also laid out a new two-tier profits tax system, announcing the tax rate for the first $2 million of company profits will be cut to 8.25 %, or half of the standard profits tax rate.
Profits above that amount will continue to be subject to a flat rate of 16.5 %.
She emphasised the proposal will not make Hong Kong’s tax system complicated and is key to boosting the city’s global business appeal.
“When you talk to businesses (about) attracting them to come to Hong Kong, tax is the first issue.
“Hong Kong’s economic freedom and competitiveness in a large way depend on our simple tax system and low tax rate. So that is the, sort of, fundamentals. What I am doing is really, on top of being simple and low, introduce an element called ‘competitive’. In a global environment with all these measures being done by cities in this region, if Hong Kong remains as is - and that is we do nothing - we will be lagging behind in terms of competitiveness.”
Mrs Lam added many cities already have a two-tier profits tax system and she designed Hong Kong’s version to be simple and at a low rate.
