Way forward: Chief Executive Donald Tsang says this year's Policy Address introduces long-term measures to improve the city's economic sustainability and create high-end jobs.

This year's Policy Address will get Hong Kong back to basics, Chief Executive Donald Tsang says, introducing long-term measures to improve the city's economic sustainability and create high-end jobs.

Speaking at a press conference this afternoon he said the development of six economic areas where the city enjoys clear advantages will add impetus to its economic growth and the spirit of innovation is particularly important to the promotion of the six industries.

"To succeed in this increasingly global economy we cannot afford to rest on our laurels. We must have new ideas. We must innovate."

When asked why there are not many alleviation measures in the policy blueprint, he said the address is about policy direction and not for allocation of resources.

"It is not the occasion for handing out goodies and the public should not expect me to deal with short-term or technical issues in the Policy Address."

Labour market

On unemployment, he said the Government has been tackling the issue step by step and has created a large number of jobs through infrastructure projects. He is confident joblessness will ease when those projects start.

"There is a sign the unemployment rate will drop further and it is time to launch long-term policy to create high-end jobs, enhance the city's competitiveness and respond to people's needs."

When asked whether there is a real-estate bubble, Mr Tsang said except for luxury flats, property prices are still below their 1997 peak.

To assess the real-estate market, the Government has been monitoring a number of factors including property prices, volume of transactions, speculation activities, buyer affordability, the number of negative equity cases and the loan situation.

Land supply

Noting there is still room for improvement in the application list system, Mr Tsang said the Government can fine-tune the land supply arrangements through discussing with the Urban Renewal Authority and MTR Corporation quickening the pace of bringing readily available residential sites to the market.

On the proposal to reserve two sites for interested operators to provide self-financing degree programmes, he said the creation of 4,000 places will not only benefit foreign students but also local ones.

"The proposal will widen the number of places available for people advancing from secondary schools to tertiary education. This is a programme which not only brings in the best in the world but also increases the number of placements of local students in our local universities. It is a win-win proposal."

Democracy development

On constitutional development, Mr Tsang said Hong Kong must move towards universal suffrage and it is important to get lawmaker's votes and gain social support and consensus.

"I attach great importance to the public consultation which will start next month. The Government will conduct the exercises in a careful manner."

Mr Tsang also promised to talk to the people and parties concerned before the proposals are put forward.

Noting there is a clear timetable for constitutional reform, he said Hong Kong people will be disappointed if no progress is made on the matter. A pragmatic approach should be adopted when seeking the best method to improve the electoral system and move towards the goal of universal suffrage.

Public interest

In a television forum tonight Mr Tsang said the property market reflects the city's economic development and the Government's land supply policy should safeguard public interest. It should avoid causing huge property price fluctuation as it could have an adverse impact on residents' assets.

Mr Tsang said the real estate market's stability can be easily jeopardised and the Government must be careful in handling the matter.

When asked what actions will be taken to conduct the constitutional reform, he said people should learn a lesson from the fact LegCo voted down the reform package in 2005 and should prevent its recurrence.

Mr Tsang said he will frankly communicate with the public and lawmakers in the upcoming consultation process with a view to formulating a proposal to improve the election methods in 2012. He urged lawmakers to show their support when they cast their votes if the public reach a consensus on the matter.

Speaking on the country's relations with Taiwan, the Chief Executive said Hong Kong will inevitably experience a negative short-term impact when the Mainland and Taiwan bolster their ties. However, the city will benefit politically and economically from their improving relations in the long run. He also hoped he will have the chance to pay an official visit to Taiwan during his term.