Key takeaways of Hong Kong’s 2023 Policy Address

閱讀中文版本

In addition to continuing to trawl for enterprises and talents, the HKSAR government will launch various initiatives to support labour and create a childbearing environment.

Hong Kong Chief Executive John Lee delivered his second Policy Address at the LegCo on 25 October 2023 (Wednesday), emphasising it carries his vision and pledge for the city's future and is a Policy Address for everyone in Hong Kong.

In his foreword, Lee said as the economy is recovering this year, Hong Kong's latest unemployment rate dropped to 2.8%, reflecting nearly full employment. However, the city still faces external and internal challenges such as keen competition from other economies, an ageing population, and a manpower shortage.

To lead Hong Kong to new heights as an economy and a community, Lee said the Government will reinforce Hong Kong's competitive edge, continue to trawl for talents, retain talents, nurture local talents, strengthen labour training and enhance the productivity of workers. Meanwhile, the Government will continue to be proactive in competing for enterprises, attracting companies and investment to Hong Kong, diversifying the economy and supporting small and medium enterprises (SMEs).

Here are some policy highlights that are relevant to businesses and HR leaders.

Attract and retain talents

Relax visa requirements: Starting from today (25 October 2023), Hong Kong will relax the visa policy in respect of employment for Vietnamese talents and the criteria for Vietnamese applying for "multiple-entry visas" for business and travel. The visa policy for Laotian and Nepalese talents for employment, training and study in University Grants Committee (UGC)-funded institutions will also be relaxed.

Establish the physical office of the Hong Kong Talent Engage (HKTE): Following the launch of the online platform for the HKTE last year, a physical office will be established by the end of this month. The office will provide support for incoming talents and follow up with their development and needs after arrival. In 2024, Hong Kong will organise a "Global Talent Summit cum Guangdong-Hong Kong-Macao Greater Bay Area High-quality Talent Development Conference" to promote regional exchange and co-operation in talent attraction.

Expand the coverage of universities under the Top Talent Pass Scheme: To expand the network for attracting global talents, eight top-notch institutions from the Mainland and overseas will be added to the list of eligible universities under the scheme, making a total of 184 institutions, with effect from November.

The Vocational Professionals Admission Scheme: To alleviate the manpower shortage in skilled trades, starting from the 2024/25 admission cohort, non-local students of designated full-time professional Higher Diploma programmes of the Vocational Training Council (VTC) will be allowed to stay in Hong Kong for one year after graduation to seek jobs relevant to their disciplines. This pilot arrangement will be reviewed after two years.

Implement the Capital Investment Entrant Scheme: Under the scheme, eligible investors who make investments of HK$30 million or above in assets such as stocks, funds, bonds, etc. (excluding real estate) can apply for entry into Hong Kong. Details of the scheme will be announced by the end of this year.

Establish the Hong Kong International Legal Talents Training Academy: A dedicated office and an expert group will be set up within next year. The academy will regularly organise practical training courses, seminars, international exchange programmes, etc.

Establish the Hong Kong International Academy Against Corruption:The Independent Commission Against Corruption will establish the Hong Kong International Academy Against Corruption in the first quarter of 2024. The academy will organise professional training for graft fighters worldwide, as well as local public and private sectors.

Expand vocational talent pool

Establish the Hong Kong Institute of Information Technology: Focus on pre-employment and on-the-job training for the IT sector. The programmes will be introduced in the 2024/25 academic year.

Increase allowance of the Apprenticeship Scheme: The VTC will, for a period of three years starting from the 2024/25 academic year, provide each registered apprentice with additional monthly training allowance, and subsidise graduated apprentices in undertaking upskilling courses of relevant trades. The two subsidy arrangements will each last for 36 months.

Enhance cross-boundary mutual recognition of qualifications: The HKSAR Government will work with the relevant Mainland authorities on the arrangements for mutual recognition of sub-degree level qualifications, including higher diploma qualifications, and will put the arrangement on trial for selected pilot areas.

Trawl for Enterprises

"Multiple-entry Visa" to the Mainland for foreigners working in companies registered in Hong Kong: Starting from tomorrow (26 October 2023), foreign staff of companies registered in Hong Kong may apply with the Chinese Visa Application Service Centre in Hong Kong for "multiple-entry visas" valid for two or more years to the Mainland, enjoying priority processing.

Develop "Headquarters Economy": Attract enterprises from outside Hong Kong to set up headquarters and/or corporate divisions in Hong Kong, bringing in quality enterprises to the city, facilitating foreign enterprises to tap into the Mainland market, and also assisting Mainland enterprises in expanding abroad.

Attract Companies to Re-domicile in Hong Kong: Introduce a mechanism to facilitate companies domiciled overseas, in particular those with a business focus in the Asia-Pacific region, for re-domiciliation to Hong Kong. The Government aims to introduce the legislative amendments into the LegCo in the first half of next year.

Labour Support

Strengthen training to promote re-employment: The Government will complete the legislative amendments early next year regarding increasing the maximum monthly retraining allowance by nearly 40% from HK$5,800 to HK$8,000 early next year. Furthermore, the Employees Retraining Board (ERB) will roll out a two-year pilot scheme in the first quarter of next year, allowing employers to arrange enterprise-based pre-employment training, with the provision of retraining allowance.

Launch a three-year Re-employment Allowance Pilot Scheme: Targeting at elderly and middle-aged persons aged 40 or above who have not been in paid employment for three consecutive months or more. Those who have worked for six consecutive months will be provided with a maximum allowance of HK$10,000, while those who have worked for 12 consecutive months will be given an additional maximum allowance of HK$10,000.

Statutory Minimum Wage: The Minimum Wage Commission will submit a report by the end of this month on how to enhance the review mechanism of the Statutory Minimum Wage. The Government will consider and follow up on the recommendations made by the Commission, and decide on the way forward of the review mechanism in six months' time.

Revise the "continuous contract" requirement (commonly referred to as the "418" requirement): The Labour Advisory Board (LAB) has agreed in principle to revise the requirement by using the aggregate working hours of four weeks as the basis of calculation. The Government will amend the Employment Ordinance as soon as possible after the LAB has reached a consensus.

Promote fertility and create a childbearing environment

Newborn Baby Bonus: A one-off cash bonus of HK$20,000 for each baby born today (25 October 2023) or after in Hong Kong will be provided to a parent who is a Hong Kong permanent resident (HKPR). This measure will last for three years and will be reviewed then.

Raise the accommodation-related tax deduction ceiling: Starting from the year of assessment 2024/25, the deduction ceiling for home loan interest or domestic rents will be increased from the current HK$100,000 to HK$120,000, an increase of 20%, for taxpayers who live with his/her first child born today or after until the child reaches the age of 18.

Increase the public service quota for assisted reproductive services: Over the next five years from 2024-25 to 2028-29, the Hospital Authority (HA) will gradually increase the assisted reproductive service quota for in-vitro fertilisation (IVF) treatment by more than 60%, from 1,100 treatment cycles per year to 1,800 treatment cycles per year. The HA will also enhance the training for the related professional personnel.

Provide tax deduction for assisted reproductive services: Starting from the year of assessment 2024/25, the Government will provide a deduction for expenses on assisted reproductive services under salaries tax and personal assessment, subject to a ceiling of HK$100,000 a year.

Increase the Working Family Allowance: Starting from next April, the household and child allowances under the Working Family Allowance Scheme will increase by 15%.

Increase child care centre places and allowances: Over the next three years starting from 2024, 10 more aided standalone child care centres (CCCs) will be set up in phases, providing about 900 additional places for day child care services. Starting from next April, the Child Care Centre Parent Subsidy, which is applicable to all government-aided standalone CCCs and CCCs attached to kindergartens, will be increased from a maximum of HK$600 to HK$1,000 per month. The Social Welfare Department (SWD) will also provide information and assistance to private organisations applying for registration to operate CCCs to encourage their provision of child care support for their employees.

Extend the After-School Care Programme for Pre-primary Children to cover all districts: Over the next three years starting from 2024, the After-School Care Programme for Pre-primary Children will be extended in phases to cover all districts in Hong Kong. The number of participating centres will be increased from 16 to 28, and the number of service places from about 670 to nearly 1,200.

Strengthen the home-based child care service: To encourage more people to participate in the Neighbourhood Support Child Care Project, starting from next April, the incentive payment at the standard rate of HK$25 per hour for home-based child carers of the Project will be increased. For carers of infants and young children aged 0-3 or children with special learning needs, the rate will be more than doubled to HK$60 per hour. For carers of children aged 3-9, the rate will be increased by 60%, to HK$40 per hour. From the fourth quarter of next year, the number of service places under the Project will be doubled to about 2,000, with the estimated number of beneficiaries to be doubled to 20,000.

Promote family education:The Government will launch a five-year Funding Scheme on the Promotion of Family Education in the latter half of next year to support community projects promoting family education. The new Scheme will consolidate existing initiatives, with the annual amount of funding increased to HK$8 million.

Operate the School-based After School Care Service Scheme: A School-based After School Care Service Scheme will be rolled out in the 2023/24 school year to allow primary students in need to stay at school outside school hours for care and learning support. This will help their parents go to work and will also benefit single parent households. The scheme will be implemented on a trial for one year.

Lead image / Hong Kong’s 2023 Policy Address Live