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Key highlights from the 2018 Policy Address

Land development, family-friendly policies and support for SMEs in the eventual scrapping of the MPF ‘offsetting’ mechanism feature prominently in Carrie Lam’s second Policy Address.

No fewer than 250 new initiatives were proposed in today’s Policy Address delivered by Chief Executive of the HKSAR Government, Mrs Carrie Lam in a whirlwind 40-minute speech to the Legislative Council.

Among the notable highlights: A proposed 1,700 hectare land reclamation off East Lantau to house up to 1.1 million people, greater support to SMEs ahead of the proposed abolition of the MPF ‘offsetting’ mechanism and a proposal to boost in the statutory maternity leave from 10 to 14 weeks.

Here are our key takeaways from the address:


  • 70% of housing units on newly developed land to be used for public housing development.
  • An initiative whereby under-occupied public rental housing households may enjoy rent exemption upon transfer to be introduced.

 ‘Lantau Tomorrow vision'

  • The ‘Lantau Tomorrow Vision’ to be launched, with the aim of making Lantau a gateway to the world and the Greater Bay Area.
  • As part of this vision, a new study to be made on the reclamation of a 1,700 hectare island off East Lantau to house 700,000 to 1.1 million people, creating an expected 340,000 jobs in the next 20-30 years.

Brownfields and industrial buildings

  • Two studies on brownfield operations to be completed within this year with a view to formulating policy and implementation measures.
  • Revitalisation scheme for industrial buildings to be re-activated, providing incentives for owners to convert such buildings and provide transitional housing within revitalised industrial buildings.



  • Tolls charged on franchised buses to be waived or paid by the government.
  • Tolls payable by private cars, taxis and motorcycles for using the three harbour crossings/tunnels to be “rationalised”.
  • Water taxi service between Kai Tak, Hung Hom, Tsim Sha Tsui East, West Kowloon and Central to be launched under a pilot programme.

Environmental Protection

  • Feasibility of regulatory control of plastic table ware to be studied.
  • Renewable energy to be developed with support to individuals and NGOs in installing renewable energy installations.

Building Safety

  • HK$2.5 billion Lift Modernisation Subsidy Scheme to subsidise the modernisation of old lifts to be launched.


  • The passage of legislation to abolish the Mandatory Provident Fund (MPF) Scheme ‘offsetting’ mechanism to be secured within the current term of government – the mechanism will be fully scrapped two years after the bill is passed (i.e. in 2022).
  • Revised plan to assist SMEs in preparing for the change: Government to offer HK$29.3 billion to employers over 25 years (instead of the previous HK$17.2 billion over 12 years)
  • Proposal to extend statutory maternity leave to 14 weeks (instead of the previous 10) – such a change will be effective immediately for government employees.
    • Private sector employers may apply to the Government for reimbursement of the additional four weeks’ statutory maternity leave pay, which will be capped at $36,822. That is to say for employees with monthly income of $50,000 or below, the additional four weeks’ statutory maternity leave pay will be borne by the Government in full.
    • Employees with a monthly wage of $50,000 or below account for about 95% of employees in Hong Kong.
  • Statutory paternity leave to be increased from three to five days as soon as possible.
  • New measures for protecting employees injured at work to be studied: enhanced treatment and rehabilitation services, speeding up processing of work injury cases and stepping up investigation and prosecution efforts against non-compliance.
  • Additional resources for the Commission on Children to be allocated.
  • 2,000 additional places under the Enhanced Home and Community Care Services and 1,000 additional vouchers under the Second Phase of the Pilot Scheme on Community Care Service Voucher for the Elderly to be provided.
  • More than $500 million to be allocated to strengthen support for ethnic minorities and promote inclusiveness.


  • More bilateral and multilateral agreements to be signed to enhance the status of Hong Kong as an international commerce and trading centre.
  • New Steering Committee for the Development of the Greater Bay Area to be established to identify opportunities for Hong Kong and co-ordinate better with the region.

Innovation and Technology

  • A further $20 billion to be injected into the Research Endowment Fund of the Research Grants Council.
  • $3 billion Research Matching Grant Scheme to be launched.
  • Fellowship schemes for outstanding academics to be introduced as a way to attract talent in research and I&T.
  • $2 billion re-industrialisation funding scheme to be established to subsidise manufacturers to set up smart production lines.
  • $2 billion to be allocated for building manufacturing facilities required by the advanced manufacturing sector in industrial estates.
  • Annual plans to open up data by government departments to be announced.

Transportation Services and Logistics

  • Different tax measures and concessions to be formulated to foster ship leasing business and aid the marine insurance sector.
  • $200 million to be injected into the Maritime and Aviation Training Fund.

Financial Services

  • First batch of virtual banking licences to be issued by the end of 2018 / early 2019 following the applications made to the Hong Kong Monetary Authority in September.


  • A proactive approach to be taken to open up certain government premises for the installation of 5G base stations by mobile service operators.

Creative Industry

  • $1 billion to be injected into the Film Development Fund.


  • Additional recurrent funding of about $1.5 billion per year to be allocated to the newly-implemented all-graduate teaching force policy in public sector primary and secondary schools.
  • A Life-wide Learning Grant for public sector schools and schools under the Direct Subsidy Scheme to be distributed through an annual provision of HK$900 million.
  • Additional provision of HK$800 million per year to strengthen support for students with special educational needs to be provided.


  • A ban on the import, manufacture, sale, distribution and advertisement of electronic cigarettes to be proposed under legislation.
  • The first District Health Centre to be set up in Kwai Tsing and expanded across other districts.
  • HK$500 million dedicated fund to be set up to promote applied research and specialisation of Chinese medicine in Hong Kong.
  • More than 9,000 hospital beds to be provided under the second 10-year Hospital Development Plan.
  • Free cervical cancer vaccination for school girls of specific age group to be provided.

Download our highlights in full here.

Find out more about this year's Policy Address and read the full text here.

Useful links

2018 Budget Address Highlights