The government is taking a long-term and systematic approach in tackling the challenges of an ageing population and attracting talent, which the Chief Executive highlighted in his Policy Address last week.

Population policy cuts across various areas of responsibility so we need to enhance coordination and cooperation among the departments involved. To achieve this I will chair the newly established Steering Committee on Population Policy.

This Committee also includes the Financial Secretary and policy secretaries in charge of education, security, health, home affairs, public finance, and labour and welfare. Directorates of the relevant departments are also involved.

The steering committee will identify the major social and economic implications brought about by anticipated demographic changes in the next 30 years.

It will then follow up on matters that require further study such as encouraging parenthood, promoting active and healthy ageing, upgrading manpower resources, more efficient and effective delivery of welfare services, and improving people's quality of life.

This is part of the concept of "progressive development" advocated in the Policy Address so that Hong Kong's advancement is not confined to the economy but also benefits all areas of society.

The steering committee will develop strategies and practical measures to achieve the objectives of our population policy as well as our overall goal of "progressive development".

A sound population policy would inevitably have to address issues such as changes to Hong Kong's demographic structure, the resources needed to establish a sound social infrastructure to cope with these changes and raising the quality of our human capital to sustain our economic progress.

An ageing population is a global trend. But, even by advanced economies' standards, Hong Kong has a long life expectancy (79.5 years for men and 85.6 years for women) coupled with a low birth rate of 984 births per 1,000 women in 2006. A recent 30-year projection by the Census & Statistics Department highlighted the problem by predicting that the median age will pick up from 39.6 in 2006 to 46.1 in 2036.

This would have far-reaching implications for our economy, healthcare, welfare, retirement protection, education and finance.

In addition to improving these areas we also need to raise the quality of our work force to remain competitive in today's globalised environment. When building a prosperous, vibrant and diversified metropolis, our foremost task is to nurture local talent and attract quality migrants to the city.

Formulating and implementing population policy is an ongoing commitment. In February 2003, for instance, the Task Force on Population Policy made 33 recommendations regarding education, manpower development, attracting talent, foreign domestic helpers, elderly policy, and welfare, many of which have been adopted and implemented over time.

Last week the Chief Executive set the policy objective of optimising our demographic structure and attracting talent by identifying four priorities. They include:

* Developing our education on all fronts and taking forward education reform through such measures as offering 12-year free education, rolling out small-class teaching, and increasing the ratio of graduate teachers in public sector schools.

* Developing Hong Kong as an education hub through the expansion of hardware, establishing a scholarship endowment fund, and relaxing the requirements regarding quota, study programmes, and employment of non-local students. This will make it easier and more attractive for overseas students to come and study in Hong Kong which in turn will broaden the exposure of local students and enhance our overall competitiveness.

* Since 1997 about 200,000 people have come to live and work in Hong Kong via various schemes set up to attract more talent to the city. We will continue to review these schemes, step up publicity, and streamline the application procedures to attract more high calibre individuals to Hong Kong.

* Introducing healthcare reform, including supplementary financing arrangements, to enhance cost-effectiveness, support an ageing population, and improve public health. We are finalising the recommendations on how to take forward the reforms and on the supplementary financing arrangements with a view to consulting the public by end this year.

This is a long-term commitment. By launching this initiative at the early stage of the third-term Government of the HKSAR, we hope to benefit from more in-depth discussions on this important topic from the community.