Some of you might remember the singer Bob Dylan, his song The Times They Are A-Changin. You remember this song? Maybe you are too young for that. It was written in 1963, and it remains one of Dylan’s most famous compositions.
And before any scribe or music historian starts to ruminate about what I’ve said today, let me just quote Dylan himself from Wikipedia: “I didn't mean the 'Times They Are A-Changin' as a statement… it's a feeling."
Now, I wouldn't flatter myself by thinking that most of you would have read through my whole Policy Address this year – or indeed the full text of any Policy Address I have delivered over the past few years. In that regard, some things may not change.
But I hope you have been able to understand the essence of what I've been saying, if I can paraphrase Dylan once more, that you ‘get the feeling’ that times really are changing in Hong Kong.
This is the undercurrent that has not only shaped this year's Policy Address, but every Policy Address I have delivered since 2005.
To reinforce what I want to speak about today, let me quickly turn to my lexicon of pithy sayings.
Pithy saying No. 1: It is better to instigate change, than to have change foisted upon you.
Pithy saying No. 2: It is better to be part of the solution, rather than be part of the problem.
Yes, these pithy sayings are clichés. No doubt about it, and we have heard them all before. But they ring true. And it is up to all of us whether or not to answer that call. I'm personally up for the challenge, and I hope you are too.
This is not the first time that I have raised Hong Kong's changing socio-political landscape with the business community – and it won’t be my last. Before I became the Chief Executive I had been urging the business community to become more aware of the politics of Hong Kong, and be involved in it.
Social issues in spotlight
When I was running for Chief Executive in 2007, I stressed the importance of properly handling the various relationships in the Hong Kong SAR, including those between the rich and poor, and between big corporations and ordinary people. That's because I could see that the sands were shifting, and that the times, indeed, are changing.
This year's Policy Address once again tackles some important social issues. These are issues that cannot be solved by the Government alone in the long run. Certainly not in a capitalist society. They can only be addressed properly with the support, co-operation and understanding of the business community and of course the community as a whole, including NGOs and social enterprises.
Issues such as: the minimum wage; standard working hours; family-friendly employment practices; a fairer deal for home buyers; greener public transport; environmentally-friendly packaging; support for social enterprises to name just a few.
All of this, in one way or another, can be broadly considered as ‘corporate social responsibility’ because it all involves action by business to help build a better Hong Kong.
Sharing prosperity
This year's Policy Address is entitled “Sharing Prosperity for a Caring Society”. Encouraging and promoting corporate social responsibility is a key element of achieving that goal.
Why is a responsible and healthy business culture so important to Hong Kong? I think the answer is simple: Hong Kong is first and foremost a business city. Business is our business. Business gives us jobs. Business makes us buzz.
There are 285,000 small and medium-sized enterprises in Hong Kong. They account for 98% of all businesses in Hong Kong. And they employ 1.2 million people – just under half our workforce.
Services account for more than 92% of our GDP. Our major service sectors include finance, insurance, real estate and business services. The largest in terms of absolute size are wholesale, retail and import and export trades, restaurants and hotels. The fastest growing are community, social and personal services.
So business is not just our lifeblood – it is in our blood.
‘Big market, small Government’
That is why we believe in the philosophy of "Big market, small Government" and devote so much time and energy attracting investment and making Hong Kong a better place to do business.
This does not just include the regulatory or the legal systems. It covers a spectrum of elements that make any city an attractive place to live and work – the environment, leisure and culture, education and health care, tolerance and openness, freedom, safety and security, transparency of government, access to information, and so on.
If all these elements come together, business can flourish – as it has in Hong Kong. And when business flourishes it creates wealth and provides jobs. It puts taxes into the government's coffers. It inspires students to strive hard at school to secure a good career. It provides entrepreneurs and innovators with the confidence to pursue their dreams. It makes the whole economy more competitive. It attracts more business. A cycle of prosperity is established. Hence, a social contract.
Any of you who were born here – or have lived here for some time – will know that Hong Kong has never begrudged success. That’s because it’s always been something we aspire to – as an economy, as a society, and as individuals. It has mostly been founded on the hard work, determination, resilience and street smarts of the great people who make up our community.
Social tension stirs
But … times are changing. In recent years business success has sometimes been equated with business excess. Social tension is increasing because the fruits of business prosperity have not been trickling down to the grassroots level. Some people feel that they are being ripped off. Social activism is on the rise.
All of this is a natural part and Hong Kong's socio-economic development and progress. It happens when a knowledge-based economy moves up the value-added ladder.
But as the economy becomes more sophisticated, so does the population. Conservation, social justice, civil rights, environmental protection, work-life balance – all of these issues are now coming to the fore.
People don't just expect more from the government. They also expect more from the business community. And we need to deal with these issues and developments pro-actively lest they foment instability, division and bitterness. None of us want to see that happen in Hong Kong.
This brings me back to pithy saying No. 1: It is better to instigate change than to have change foisted upon you.
Change for the better
Change is happening, ladies and gentlemen. You can help ensure that this is a change for the better.
In this year's Policy Address, I have announced new policies or measures that will inevitably involve business sector input and co-operation.
For example, the minimum wage. This is something that we have been discussing for a long time in Hong Kong. We initially preferred to see if we could do this without legislation. We gave the business community ample opportunity to come on board with, for example, our wage protection movement. But, alas, the response was rather tepid.
So, in the end we had to legislate. We passed the minimum wage law in July this year. We are now debating the level of the minimum wage. And we expect it to be implemented in the first half of next year.
This brings me to another issue closely related to wages, which is standard working hours. This is another sacred cow that we have to tackle in Hong Kong.
Standard working hours
Overly long working hours do impact on the long-term health of your company as well your employees. Increased stress, no exercise, poor diet, insomnia, lack of family or leisure time – all of this affects the physical and mental well-being of employees. Over prolonged periods, employees can become sick, or more prone to illness. All of this affects the productivity of your business, as well as a company's reputation as a caring employer.
I have asked the Secretary for Labour & Welfare to conduct a study on this matter. We know that it is a highly complex matter, but I believe that it should no longer be ignored. In the meantime I would appeal to all companies in Hong Kong to try their best to help their employees enjoy a proper work-life balance. At the end of the day this will be good for business, because you will have happier and healthier staff, who in turn will be more productive and easier to retain.
We also need a competition law to maintain a level playing field, and a competitive environment which is conducive to new market entries and offers better protection for consumers. We introduced the Competition Bill into the Legislative Council last July. I hope you will give it the necessary support.
Sharing fruits of success
I mentioned earlier that tensions are developing in society because the fruits of the economic recovery have not trickled down to all levels of the community.
In my Policy Address I have taken a fresh approach to sharing prosperity – an approach that goes beyond our current fiscal commitments in education and training, housing, transport, welfare and social services. Those commitments continue. The Hong Kong Special Administrative Region Government will not spend any single cent less than before on these services.
But we need to do more. But whatever best scheme we devise, there are people, unfortunate people, who will not be able, because of the rules that we must make, to be benefitted by these schemes.
So the Community Care Fund that I announced will allow the government and business community to work together to address some of the problems that can't be tackled by government programmes or services, or even non-governmental organisations.
The government will inject $5 billion into the Fund, and I hope to raise another $5 billion from the business community. So far the response has been very encouraging.
Working together
Some of my friends in the political circle have dismissed the fund as a Government-business collusion. I honestly fail to see the logic. Is it really something so objectionable when the government and the business community work together to help people in need?
When it comes to helping people, I believe that no one should be discouraged. When it comes to helping people, I believe we should take off our political lens and focus on people’s needs. When it comes to helping people, the question is not whether to do it or not, but how to do it right and do it quickly.
The Chief Secretary is working hard to devise the operation mechanism of the fund and is talking to key stakeholders to gauge their views in order to devise the rules involved.
The Community Care Fund represents a partnership between Government and business for the benefit of society. We will combine the strengths of the public and private sectors to provide the most effective helping hand to those in need but out of reach of the conventional public welfare programmes.
Fresh approach
Above all, the Fund will provide a new approach to helping people and further promote the spirit of philanthropy in Hong Kong – a spirit, I must say, have been very well entrenched in the community.
Now, let me mention something different – the property market, which has always been a major concern of Hong Kong people. In this Policy Address I have announced various measures to ensure an adequate land supply, to refocus our urban renewal efforts, and to help the sandwich-class get onto the property ladder.
Most of all, I have stressed my guarantee for providing housing for the grassroot people, so that adequate public rental housing will continue to be a firm programme, and nobody on the queue eligible for public housing will have to wait more than three years on average. That is a commitment we will not back off. We will continue.
In a free and open economy such as Hong Kong, market forces will ultimately determine price levels. Corporate social responsibility comes in again when people put their money on the line to buy their home – the biggest investment most will ever make. The high prices concerning people now are thrown into sharper focus when the apartments they buy do not live up to the marketing hype.
Property sales to be regulated
Floor area calculations, green feature exemptions and the problem of so-called "inflated buildings" are all issues that consumers have been talking about, to put it mildly. We have tried to work with the property developers to address these issues, but still differences remain.
That is why we will regulate the sale of new properties more tightly. We expect recommendations within a year, including the use of saleable floor space as the only basis for listing the price per square foot to avoid misleading buyers and eradicate the problem of so-called “shrunken flats”. This will be done by legislation.
This is not to punish property developers. This is to ensure that new property transactions are fairer and more transparent, which is in the best interests of developers themselves, buyers and Hong Kong as a whole. And some developers have been telling me, "We don't mind doing it. But unless you have legislation, some other people might not obey what you have said and they will breach the rule and then we suffer." And I appreciate that. The only way to ensure that there will be uniform fair rules is through legislation.
Towards a greener HK
On corporate responsibility towards the environment, the emphasis again is on partnership. Buses, at the moment, are a major source of roadside air pollution. That is why the government will pay for trials of cleaner hybrid vehicles to see how they fare in Hong Kong’s conditions. But if the bus companies can find suitable electric buses to test, we'll fund them as well.
We'll also fund the retrofitting of Euro II and Euro III vehicles – which account for 60% of the bus fleet – to ensure they meet the more stringent Euro IV nitrous oxide emission standards. The bus companies will be responsible for the ongoing maintenance. That will be quite minimal.
Looking ahead to when the bus franchises expire over the next few years, we will ensure that zero-emission buses, or the most environmentally friendly ones available, are bought by the companies when older buses are replaced.
Our goal is to have zero-emission buses running across all of Hong Kong. In the meantime, we will work to create low-emission bus zones in heavily congested areas such as Central, Causeway Bay and Mong Kok.
Creative ideas welcome
Hong Kong's corporate sector has a long and generous record of charity work and giving back to the community. I truly thank them for it. But times are changing. We must do it positively. We must do it collectively. We must do it creatively. We all cherish and deeply appreciate these caring contributions to all manner and range of worthy causes.
But the changing socio-economic face of Hong Kong warrants a closer, perhaps new look at how companies can contribute, not just to the economic well being of Hong Kong, but to the well-being of your employees, and to society as a whole. It is, indeed, and I admit it, a heavy mission but it is a mission the business community is well equipped to handle.
Support for social enterprises, for example, can be more than just about raising or donating money. Hong Kong’s corporate sector has a huge knowledge bank to share with others – different strengths, experience, skills – that can make a real difference to a fledgling social enterprise whose mission is simply to help people in need.
In the final analysis, what is good for society is good for business, is good for the economy, is good for Hong Kong as a whole.
Champions of change
At this crossroads of our development, in these changing times, I look to you, and to the business community to partner with the government, NGOs and social enterprises to be champions of change in Hong Kong.
I look to the business community for creative solutions to some of the problems we face.
I look to the business community to understand more deeply the crucial role you all play in making Hong Kong a better place to work and live. A better Hong Kong will in turn sustain business profits and success - a winning equation for all.
Chief Executive Donald Tsang gave this address at the Joint Business Community Luncheon held at the Hong Kong Convention & Exhibition Centre.
