2017 Policy Address – Key Points

Chief Executive Carrie Lam revealed the details of her maiden Policy Address at the Legislative Council this morning. A number of initiatives will be of interest to the business and international communities and are summarized below.

Full details can be found at: https://www.policyaddress.gov.hk/2017/eng/index.html
Highlights: https://www.policyaddress.gov.hk/2017/eng/highlights.html

Economy

*Support SMEs by reducing profits tax to 8.25% for first $2 million (US$255,000) profits. Remaining profits to be taxed at current rate of 16.5%.

*Encourage R&D investment with 300% tax deduction for first $2 million R&D expenditure, and 200% deduction for remainder.

*Increase CDTAs to 50 within the next few years.

*Sign FTA and IPPA with ASEAN in November; and sign a CEPA with Macao this year.

*Open an Economic and Trade Office in Thailand – the third ETO in ASEAN.

*Demolish and redevelop the three government towers in Wan Chai to create a new, integrated wing for the HKCEC with 23,000 sq m of convention and exhibition facilities.

*Boost diversified development of tourism sector, including cultural, heritage, green and creative tourism.

*Issue “green bonds” to encourage investment in green projects via HK capital markets.

*HKMA to launch a Faster Payment System in 2018 to promote more diversified and flexible payment products.    

Innovation and Technology

*Set aside at least $10 billion in university research funding to further encourage private companies to increase R&D spend

*Kick-start a $500 million “Technology Talent Scheme” to train and pool technology talent

*Inject $3 billion into the Research Endowment Fund

*Use $2 billion of the Innovation and Technology Venture Fund Scheme to co-invest on matching basis with VC funds investing in local tech startups

*Invest $700 million to take forward Smart City initiatives, including “smart lampposts”; and develop an intelligent transport system (parking meters, payments, real-time parking information)

Creative Industries

*Inject $1 billion into the CreateSmart initiative to boost support for design and creative industries

Labour Rights

*Propose a way forward to abolish the offsetting mechanism for MPF contributions

*Increase paternity leave from 3 to 5 days; and study enhancing maternity leave for working women  

Education

*Set up a $12 billion Hostel Development Fund to provide unit cost subsidy for university hostels

Arts, Sports, Culture      

*Increase resources for local artists and groups to perform outside Hong Kong

Countryside

*Establish a Countryside Conservation Office and earmark $1 billion to implement revitalisation and conservation efforts

The Policy Address also contains a number of new initiatives on land and housing supply, healthcare, care for the elderly and underprivileged, improving livelihood, and youth development

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