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11-10-2017
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 summarised below. 

A copy of the Policy Address and the CE's speech to LegCo is being sent to your offices by courier and should arrive tomorrow. 

In the meantime, 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 and 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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