Chief Executive Carrie Lam’s policy address last month was a departure from past practice in several ways.
First, the date for delivering the address was moved forward, from January 2018 to October this year. This will allow the legislative council more time to discuss policy proposals.
As many people noticed, the speech by the chief executive was shorter than usual. In her address, Lam laid out the main themes and the thinking behind them, while the full policy initiatives were delivered in a separate document.
The executive council, of which I am convenor, had some input into this change. Over the years, policy addresses have been growing longer, and the hope is that a shorter, more direct address will be more effective. This also means there are no time restraints on the list of proposals.
In line with previous practice, it certainly included quite a few specific measures which were well received (Our Hong Kong Foundation and CPA Australia issued statements welcoming a range of initiatives). But it also indicated some genuine changes in direction or new thinking. These not only proposed new ways forward, but perhaps prepare us for more new or more ambitious initiatives to come in future.
The best example of this in the policy address is probably housing – our hottest issue.
The current housing problems have a complex range of reasons. Demand can be affected by various factors – from migration, to changes in household size, to economic growth to the level of interest rates. While these factors might be changing at different times and speeds, it takes years for empty land to become housing. During the last 15 years, we have experienced a serious mismatch in supply and demand.
The chief executive wants to ensure better supply of land for the future. This follows through on the previous administration’s efforts in this long-term aim.
At the same time, Lam wants to make it easier for more of our average and above-average earning households – our broad middle class – to afford to buy their own homes and have more of a stake in Hong Kong. The administration is therefore proposing new initiatives to provide subsidized homes for sale to more income brackets.
This includes incentives for better-off people in public rental housing to buy private-sector homes (thus freeing up the public units for poorer families). Another idea is to create a new category of “starter homes” for families who have been priced out of the market. These are new initiatives that expand on older, more restricted approaches.
Another idea is to examine how to encourage developers to produce mixed developments that include cheaper homes. This is a shift in policy (though it is an approach common in many cities throughout the world). Public opinion is mixed, partly because critics distrust any sort of coordination with developers. But this reflects a serious truth – that any effective solution to the housing problem will probably be controversial. We need bold ideas.
Another example of a more flexible approach to housing problems is in finding accommodation in the short term for those in urgent need. Again, this is a change in thinking. As well as encouraging the Community Housing Movement (opening up unused units to short-term rentals to the needy), proposals included converting industrial buildings into transitional housing and even looking at constructing pre-fabricated housing on empty land.
These are imaginative and creative ideas. If the government can propose new concepts like this in housing, it can do it in other areas too.
The chief executive mentioned new approaches to business taxes, to reduce profits tax for smaller companies and to provide incentives for R&D. Her address proposes a range of other measures to encourage innovation and technology. It suggests a serious reform of primary health care services, with a more integrated and district-based approach to service delivery. And it outlines important new measures to improve elderly care, to enhance resources for education, and to open up public-sector employment opportunities for ethnic minorities.
The policy address is a serious attempt to propose bold but realistic ways forward. If some of the proposals are controversial, that is probably a good thing. We need new thinking, and if proposals like these encourage more people to think out of the box, the speech can be deemed a success.
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