1999 Policy Address


VI.The Foundation of Prosperity and Progress

141. To achieve even greater success in the next century, Hong Kong must not only have people of high calibre and a quality environment, but also sound institutions and a basic structure which is conducive to economic prosperity. We must also have a caring and decent value system that attaches great importance to our people's cultural and spiritual life. I would like to touch briefly on the main issues.

A.Our Institutions

Promoting the Basic Law

142. The Basic Law underpins our institutions. This enables us to build a quality society with unique characteristics. The rule of law, a clean administration, freedom of the press, protection of the freedoms and rights of the individual, are all essential elements contributing to the success of Hong Kong. The SAR Government will do its best to protect these valuable assets. Next year will be the tenth anniversary of the promulgation of the Basic Law. The SAR Government will organise a series of activities to promote better understanding of the Basic Law and to encourage relevant research. The Government will also seek to enhance mutual understanding between Hong Kong and the Mainland of each other's legal systems. It is important that we do our utmost to maintain our existing system. Yet at the same time, we should work towards better mutual understanding of our two systems, and better understanding of our country. Only with full understanding of "One Country" can we successfully maintain "Two Systems". I am confident that with increased communication, better understanding and more experience, there will be greater consensus on the implementation of the provisions of the Basic Law, and that this will thus further strengthen the foundation for the rule of law in the Hong Kong SAR.

Rule of Law

143. The rule of law, in which I firmly believe, is fundamental to our success. It is precisely because of the full implementation of the Basic Law after the reunification that we have been able to continue to practise and develop the common law system in Hong Kong. This constitutional arrangement put in place under the "One Country, Two Systems" principle is unique.

144. With a new constitutional arrangement, there are bound to be teething problems which need to be handled carefully. I am sure our legal system will operate much more smoothly given time and experience. On the right of abode issue, we solved an important and difficult problem for Hong Kong in full accordance with the powers vested in us by the Basic Law and its prescribed procedures. There are divergent views within the community on this issue. However, the fact is that by resolving the right of abode issue, we have succeeded in protecting long-term the interests of the community while at the same time upholding the rule of law.

145. I firmly believe that all are equal before the law, and I will do my very best to uphold the rule of law in Hong Kong. Our legal system has always run well. Our police are maintaining law and order as always. The judiciary remains independent with the same judges hearing cases in the same fashion as they did before the reunification. Hundreds of thousands of cases are heard each year with the Government sometimes finding itself on the losing side.

Constitutional Development

146. Since the reunification, we have witnessed a strong interest on the part of the community to participate in public affairs. The SAR Government is committed to the progressive development of our democratic institutions in accordance with the Basic Law. Our two top priorities are to prepare for the District Councils elections in November and for the second Legislative Council election to be held next September. The Secretary for Constitutional Affairs will give further details.

147. In accordance with the spirit of the Basic Law, we need to establish an executive-led political structure. Over the past two years, the executive authorities and the legislature have explored ways to establish a co-operative relationship based on mutual checks and balances. I hope that both the executive authorities and the legislature will perform their specific functions in accordance with the Basic Law and work closely together in the interests of the community. My Administration will make still greater efforts to maintain communication with the Legislative Council and secure its greater support.

148. In my last Policy Address, I said that the two Municipal Councils will not be retained as from the year 2000. The new streamlined framework will facilitate better co-ordinated and more efficient, and hence more cost-effective delivery of municipal services. More importantly, it will allow further participation by those in the fields of arts, culture, recreation and sports. This is conducive to the development of such activities in Hong Kong. I hope Honourable Members of this Council will give us their support.

149. The first District Councils (DCs) of the Hong Kong SAR will come into being on 1 January 2000. As I promised last year, the role of the new DCs will be enhanced. We will invite DC Chairmen and the newly created Vice Chairmen to join the District Management Committees. We will assist the DCs in promoting cultural, recreational and sports activities and in monitoring local environmental hygiene. We will appoint more DC Members to various advisory committees on livelihood matters. Moreover, we will provide additional funding for improving the local environment, promoting district activities, and increasing the accountable allowances of DC Members. Government departments will have closer co-operation and communication with the DCs and the various advisory bodies.

150. As for the development of our political system, I have heard divergent views. Some say now is the time to quicken our pace towards universal suffrage or, at least, to start examining and discussing this issue. Others say we should be more cautious as we have been going too fast. In my view, the pace of democratic development must be in step with the actual situation in Hong Kong. We must allow time for further study and for the present political system to mature. The Basic Law has laid down a 10-year timetable to enable us to consider the next step forward in the light of our political experience during that time. I hope that by 2007, a mature view will have emerged in the community on the development of the political structure which will help us to decide on the strategy and the steps needed for its further development.

Introducing Reforms while Maintaining Stability

151. Earlier, I said that our institutions provide the basis for our development. Over the years, we have put in place well-established systems and structures which enjoy the confidence of our community and investors, such as our highly-admired administrative structure and the civil service. On the other hand, there are areas that clearly need reforms. Some of the existing systems and procedures may not be able to adapt to the changes and demands of the new era. Since Hong Kong has enjoyed a high degree of autonomy following the reunification, it is also only natural that the community has greater expectations of the Government. Moreover there is still room for improvement. Given the changing circumstances and rising aspirations, standing still is simply not an option. During the past two years, the Government has been determined to remove any weaknesses through reform. Also there have been voices in the community supporting and urging faster reforms. Some worry, however, that we may be attempting too much, too quickly.

152. The reforms that we are talking about can be broadly grouped into three types. The first is related to the improvement to some market mechanisms and injecting greater vitality into our markets. The second is the rationalisation of the Government's basic policies or delivery systems. The third is the modernisation of the civil service structure which involves government efficiency.

153. Reforms of the first type include the strengthening of the linked exchange rate regime and the merger of the two exchanges. These reforms will remove some of the weaknesses which surfaced in the financial turmoil and further strengthen our position as a financial centre. These two initiatives are the inevitable consequence of changing circumstances. As they are steps in the right direction and have been taken at the right time, they have a very good chance of success. With regard to the privatisation of a part of the shares of the MTRC, this allows the community to participate in the ownership of a successful and profitable public corporation, and the introduction of private ownership will reinforce the MTRC's commitment to competitiveness and efficiency.

154. The second type of reform is the rationalisation of the Government's basic policies or administrative structure, such as education reforms and the dissolution of the Municipal Councils. In the welfare sector, reform of the Comprehensive Social Security Assistance (CSSA) Scheme is being implemented in order to look after more people who are suffering financial hardship during the economic downturn, without dampening the CSSA recipients' incentive to work, and at the same time, ensuring that the Scheme serves as a long term safety net. Moreover, we will also introduce reform to our existing subvention system, so as to enhance the cost effectiveness of services provided and to improve public accountability. As regards the health care system, we anticipate difficulties in the longer term and we have commissioned an early consultancy study. For the time being, we are still in the stage of deliberation and consultation - it is not our intention to rush this reform.

155. The third type of reform covers the modernisation of the civil service, productivity enhancement, and entry pay adjustment. These reforms are being implemented gradually after full consultation and careful deliberation. The aim is to improve our services and efficiency. After reform, the quality of government services will be enhanced. The general public supports these reforms, which are proceeding smoothly. We will proceed prudently and make every effort to maintain the morale and stability of the civil service. Any reform proposals which might affect a large number of existing staff will be implemented in an orderly manner. We will consult the staff affected and listen to the views expressed by the Central Staff Consultative Councils in formulating specific proposals. In the process of reform, we will endeavour to make reasonable arrangements for serving staff and will avoid staff redundancies as far as possible through inter-departmental redeployment, secondment and staff retraining.

156. Another reform to improve the Government's efficiency concerns proposals to corporatise or privatise individual departments. At present, we will concentrate on the scheme for private sector involvement in the estate management work of the Housing Department. In the process of reform, we will ensure that the legitimate rights of serving civil servants are protected. With respect to other departments, we will conduct in-depth studies and consulations before we take any further steps.

157. When we consider the reforms mentioned above, we will give careful consideration to the issues in question, prioritise the reforms, and carry out extensive public consultation. We will also take into full account the prevailing circumstances and the impact on the community. Moreover, in seeking reforms, we will do so step by step paying due attention to the need to maintain the community's prosperity and stability. Depending on the individual circumstances, we will introduce reforms in different areas at varying speeds and by different means. I am confident that by implementing reforms step by step in a well-planned manner, we will be able to build a better society.

B.Government's Role in the Economy

158. Here I would like to talk about the role of the SAR Government in our economy. As we all know, Hong Kong's remarkable economic success over the past few decades owes a great deal to our free and market-oriented economy with fair competition. The Government is committed to building the foundation for the healthy development of the market according to sound economic principles. It is only when the market mechanism is not working properly that the Government steps in and exercises necessary and limited intervention. Since its inception, the SAR Government has carried on the tradition of fiscal prudence and small government. All the Government's economic endeavours are infrastructure related. Infrastructure can be divided into two major categories: software and hardware. The former includes the framework for education, environment, rule of law, regulation of specific markets, etc., whereas the latter includes public facilities for air, sea and land transportation, tourism, communications, information technology, as well as scientific research, etc. Before decisions on infrastructure are taken, the Government invariably undertakes extensive consultations to get a clear picture of the economic trends and market dynamics, and considers the general direction of our strategic development. All our strategic initiatives are market-oriented and designed to support the development of the private sector. Of course, in the face of rapid changes and fierce competition, the SAR Government ought to, and in fact does, respond more quickly on the economic front than before. Yet the guiding principles and the nature of our work have not changed.

C.Our Society and Culture

159. A bright future for Hong Kong encompasses not only economic progress, but also the building of a caring, decent society with a rich cultural life.

Helping the New Arrivals

160. We cherish family reunion. Many people in Hong Kong have relatives on the Mainland. Through an orderly arrival arrangement, 54 000 family members of Hong Kong people are allowed to come from the Mainland and settle here each year. This is no small figure. The new arrivals are also members of our society and they will contribute to our future development. To help the new arrivals integrate into society more easily, the Government has introduced a wide range of measures, such as providing them with various kinds of information and tailor-made courses, as well as offering financial assistance for the education of their children.

161. I understand that housing is the major problem facing families newly arrived from the Mainland. According to the existing policy of the Housing Authority, families applying for public rental housing should have a majority of their members satisfying the seven years' residence rule before they are allocated housing. Furthermore, the Housing Authority treats non-adult children born in the Mainland to parents who are Hong Kong permanent residents differently from those born in Hong Kong. I have asked the Housing Authority to consider reviewing these criteria so that a family will be eligible for allocation of public rental housing if at least half of its members meet the residence rule; and non-adult children born in the Mainland to parents who are Hong Kong permanent residents will be treated the same as those born in Hong Kong. This will ensure a fairer and more rational approach to the allocation of public housing. I want to emphasise that although more people will be added to the waiting list, the Government is committed to building more public housing flats at a faster rate, thus the waiting time for public housing will still be reduced, not lengthened.

162. To help newly arrived children integrate into the local school system, we are looking into the possibility of cross-boundary co-operation. We will follow the example of some voluntary bodies and provide these children with induction services before they arrive in Hong Kong. Such services will range from providing English readers to conducting preparatory courses.

163. The unemployment rate of the newly arrived is slightly higher than the average rate in Hong Kong. The Labour Department has set up employment and guidance centres to provide employment services for new arrivals. The ERB has also extended its service to new arrivals and will handle applications from those aged below 30 flexibly. In general, all new arrivals who are jobless should be able to join the training courses offered by the ERB.

Hong Kong's Culture and Creativity

164. Hong Kong's future development is not just a matter of pushing forward with physical construction. What we also need is a favourable and flourishing cultural environment that is conducive to encouraging innovation and creativity in our citizens. Our reunification with the motherland has enabled us to build on Chinese culture and at the same time draw on Western culture to develop our own distinctive and colourful culture. We will continue to promote public understanding of Chinese culture, history and heritage on the one hand and to enhance our exchanges and communication with the rest of the world on the other, so as to learn from different cultures around the world. Hong Kong possesses a unique cultural history going back several thousand years. This not only helps us to establish our identity but also serves to attract tourists. I have proposed to develop Hong Kong into an international centre for cultural exchanges. This will help to strengthen our identity as a world-class city.

Protecting Intellectual Property Rights

165. A sound intellectual property rights protection regime is a prerequisite for promoting innovation and investment in technology. We have in place a well-developed legal framework for this purpose and action is being taken to strengthen it. But the key to effective protection of intellectual property rights is compliance with, and enforcement of, the law. Consumers should show their support by boycotting pirated goods. The SAR Government is determined to continue combating piracy through law enforcement and education.

Sports

166. We have been supporting the extensive promotion of sports development so that our citizens can enjoy vigorous health and a colourful community life. In addition, we have been sending our athletes to take part in national and international events which will help heighten the community's competitive spirit and strengthen our social cohesion. The SAR Government will strive to enhance the quality of our sporting environment through the provision of more educational and training opportunities, as well as additional recreational and sports facilities. We will also actively foster more exchanges in sports with the Mainland and other parts of the world.

Moral Values

167. I believe we all desire a society of greater harmony, in which everybody respects and treats others well. We should carry forward our traditional virtues, such as filial piety, humanity, importance attached to education, and diligence. We favour consultation, not confrontation. We seek protection of the rights of the individual, yet we should also fulfil our social responsibilities and obligations. As a responsible government, we will enhance our services and support to the aged, frail, disabled, unemployed and families in need. We also hope that the voluntary organisations will keep up their important contributions.

Media Ethics

168. The media has an important role to play in creating a decent social and cultural environment. In an open society like Hong Kong, the media exerts influence on our social and cultural ethos every day. Parents, teachers and even media personnel have told me about their concerns over the excessive display of violence and pornography, as well as the sensational and sometimes false news reports made by some members of the media. In fact, a number of local groups have already taken the initiative to promote public awareness of media ethics. The SAR Government will continue to protect press freedom in strict accordance with the Basic Law. But we also believe "press freedom" should not become a pretext for disregarding media ethics. It is inexcusable for any media operator to resort to pornography, violence, libel or misrepresentation simply for profit. There is strong public opinion that we should protect our younger generation from the undesirable influence of violence and pornography. I understand that Members of this Council have held many discussions on the professional ethics and social responsibilities of the media. This is an issue of prime public concern which deserves the Government's due attention.

169. In addition, the Law Reform Commission has put forward recommendations on the issue of media intrusion on individuals' privacy for public consultation. The SAR Government awaits with interest the outcome of the public consultation exercise. In this respect, I share the hope of our citizens that the media can set higher standards for their professional ethics and truly exercise self-discipline.


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