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February, 2009:

Health Hotline Flooded Since Tobacco Duty Raised

Hotline flooded since tobacco duty raised 50pc in budget

Ng Kang-chung – SCMP – Feb 28, 2009

The decision to raise the tobacco duty in the budget to discourage people from smoking seems to have had an immediate effect – a hotline that helps people kick the habit has been flooded with inquiries.

By 4pm yesterday there had been 403 inquiries to the Department of Health’s hotline – 1833 183. It received 322 calls on Thursday, against a daily average of just 12 last year.

The hotline is manned by nurses who provide counselling. After hours, a computerised call-handling system provides information on quitting smoking.

Financial Secretary John Tsang Chun-wah announced the 50 per cent increase in tobacco duty in his budget speech on Wednesday. With immediate effect, the duty on cigarettes increased from around 80 cents per cigarette to about HK$1.20.

The increase pushed the retail price of a pack of 20 cigarettes to about HK$39, up from HK$29.

Mr Tsang estimated that 10 per cent to 20 per cent of smokers would opt to quit after the duty increase.

Meanwhile, the health minister disclosed yesterday that the idea of imposing an import ban on cigarettes was once considered as a move to force people to stop smoking.

Secretary for Food and Health York Chow Yat-ngok also warned the government could one day reconsider such a move.

Dr Chow made the comments during a radio phone-in programme in which he faced a torrent of criticism over the move to increase tobacco duty by 50 per cent.

In yesterday’s RTHK Talkabout programme, one smoker, a Mr Ching, asked why the government did not simply outlaw tobacco imports.

Dr Chow said: “It was not that we had not thought of this idea. But society is changing and the habit [of smoking] can change by not [banning imports]. In the past 10 to 20 years, we have increased tobacco duty and strengthened education in the hope of encouraging people to quit smoking.

“Many places in the world are using more or less the same means.”

Repeatedly challenged by Mr Ching over an import ban, Dr Chow said: “We have not ruled that out. One day, we might consider that or carry it out.”

But he was quick to add: “Hong Kong is a free society. We hope people can kick the habit willingly.”

According to figures from the Department of Health’s Tobacco Control Office, the proportion of smokers dropped from 14 per cent of the population in 2005 to 11.8 per cent in 2007-08.

The percentage of young smokers – aged between 15 and 19 – also fell, from 3.5 per cent of the youth population in 2005 to 2.4 per cent in 2007-08.

But Dr Chow said he was still worried. “Young smokers now consume 11 sticks every day, as compared to nine sticks in 2005.”

On media reports about a surge in smuggling of cigarettes after the duty was increased, Dr Chow said: “Customs will have sufficient measures and resources to deal with this problem

HK$10 Rise In Price Of A Packet Of Cigarettes

Smokers left gasping at HK$10 rise in price of a packet of cigarettes

BUDGET 2009 – SCMP – Bryony Taylor – Feb 27, 2009

Tobacco companies yesterday capitalised on the 50 per cent tax increase proposed in the budget by adding an extra HK$2 per pack onto the retail price.

Almost all brands increased by HK$10, rather than the HK$8 tax increase announced on Wednesday. Retailers 7-Eleven and Circle K said they were told by the suppliers to make the larger increase.

Philip Morris International estimated the increase in tax would mean an extra cost of HK$2,000 a year for a smoker who consumed 14 cigarettes a day.

However, this estimate does not take into account the extra HK$2 per pack, which adds a further HK$555 a year on average.

Despite this, lucky customers at Circle K stores continued to buy cigarettes at the old prices due to late publication of new price lists from suppliers. But some small vendors took advantage of the tax increase by putting up prices by HK$12 a pack.

“We have informed our trade partners that the price of most products must increase due to the significant tax increase and anticipated drop in the sale of duty-paid tobacco,” Philip Morris said.

Many anti-smoking groups were worried that the increase would be absorbed by the manufacturers, but this has not been case.

Philip Morris also expressed worries that the higher tax would provide business for illegal traders.

Anti-smoking campaigners deny this, however, and stressed the strength of Hong Kong’s customs department.

Cigars have also been affected by the increase, but due to their more complex pricing structure, new price lists have yet to be released.

“We are pleased that the tobacco companies are helping our cause by increasing the price further,” said Anthony Hedley, of the University of Hong Kong’s school of public health.

Li Cheong-lung, from the Committee on Youth Smoking Prevention, said: “Price influence is one of the most important reasons of youth smoking.

“Some youths have told me that they attempted smoking by purchasing lower-priced products, therefore the price increase could help stop newcomers.”

New prices

Marlboro HK$39; Kent HK$39; Salem HK$39; Next HK$34; L&M HK$36; Dunhill HK$39; Davidoff HK$35; Winfield HK$34; Capri HK$41; Winston HK$35

Tobacco Tax Rise Applauded

Feb 27, 2009 – SCMP

Hong Kong Cancer Fund applauds the government’s decision, announced in Wednesday’s budget, to increase the tobacco duty by 50 per cent.

Significant steps forward like this, combined with public awareness and tobacco control measures, can serve to minimise the burden of chronic illnesses such as cancer in our community.

As a charitable organisation providing free information and cancer support to more than 23,000 individuals diagnosed with cancer each year, we are pleased that Hong Kong’s policymakers are setting new parameters that will help us to control cancer.

Sally Lo, chairwoman, Hong Kong Cancer Fund

50pc Tobacco Duty Rise Brings Confusion

BUDGET 2009 – Ella Lee and Danny Mok – Feb 26, 2009 – SCMP

Confusion arose last night over cigarette retail prices, with two major tobacco agents taking the unusual step of not raising charges immediately after a 50 per cent increase in tobacco duty was announced in the budget.

Some retailers immediately raised prices, while others imposed a limit on the number of packs each customer could buy.

British American Tobacco Hong Kong and Hong Kong Tobacco did not raise charges yesterday, along with most 7-Eleven outlets and other vendors.

But most 7-Eleven stores allowed each customer to buy only two packs a time. Smokers were seen rushing for cigarettes at outlets of Circle K, which did not raise charges.

Most petrol stations did not increase their prices.

However, some vendors raised prices by HK$8 a pack after the budget.

The 50 per cent increase in duty was welcomed by anti-smoking activists. However, they were quick to warn that the measure should not lead to any “trade-off” with the tobacco industry.

Financial Secretary John Tsang Chun-wah announced that the duty would be increased from about 80 HK cents per cigarette to HK$1.20, with immediate effect. The duty for cigars was increased from HK$1,035 per kg to HK$1,553. Tobacco duty was last raised in the 2001-02 financial year – from 76 cents to 80 cents a cigarette.

Executive secretary of the Tobacco Association of Hong Kong Raza Zulfiqar said the trade was disappointed with the “drastic increase” in tobacco duty, adding that it would only stimulate smuggling of cigarettes. He said individual tobacco companies would decide later on the new retail prices of their products.

A senior government source said the increase was not aimed at increasing revenue for the administration but at reducing the smoking population. There are about 754,800 smokers in Hong Kong, or 13.2 per cent of the population aged over 15. Fears had been raised about the increasing number of young and female smokers in Hong Kong, the source said.

Secretary for Food and Health York Chow Yat-ngok said the measure could deter more young people from smoking.

Tobacco tax has been increased from HK$16 to HK$24 per pack of cigarettes, with retail prices of some popular brands expected to rise from about HK$29 to HK$37 a pack.

The anti-smoking group Clear the Air said the government must legislate for the excise tax to be not less than 80 per cent of final retail cost, to prevent tobacco companies reducing prices to offset the tax rise.

Anti-tobacco groups had been calling for the administration to increase tobacco duty after government figures showed a 13.8 per cent rise in cigarette consumption since 2006, despite a smoking ban in restaurants.

Anthony Hedley, a professor in community medicine at the University of Hong Kong, welcomed the move and said it plugged a big hole in tobacco control.

“Credits should go to the NGOs, the Department of Health and the Food and Health Bureau which have pushed for the increase,” he said.

Going Up In Smoke

Despite the perception that Hong Kong has made strides against smoking, activists and public health officials say the opposite is true

SCMP – TOBACCO – Raymond Ma – Feb 26, 2009

How did it all come to this? That is the typical response of anti-tobacco campaigners, when asked about their crusade to rid Hong Kong of a highly addictive but legal product that has been linked time and again to everything from obesity and diabetes to stroke and cancer.

Anthony Hedley, chair professor of community medicine at the University of Hong Kong, has been campaigning for tougher anti-smoking laws since he arrived here 21 years ago. He believes that “we are losing an enormous amount of ground”.

“From a public health point of view, it’s very serious,” he said. “Hong Kong is beginning to stand out among economically developed nations as a place which is losing progress in terms of the gains which it made in advocacy and legislation, and it will eventually lose ground in terms of health protection.”

Such concerns are not without foundation. Research by the university has estimated that 7,000 Hongkongers die from active or passive smoking each year.

The total cost to the community, taking into account pain, suffering and lives lost, is put in excess of HK$70 billion per year. Smoking is considered one of the biggest health concerns in developed countries, right up there with high blood pressure, alcohol misuse and high cholesterol.

However, despite the tireless efforts of people such as Professor Hedley and a strong community of tobacco-control activists and public health officials, there is a growing consensus that the city is losing its war against cigarette consumption.

This may not be readily apparent to the average man or woman. According to figures from the Department of Health’s Tobacco Control Office, the percentage of Hongkongers who smoked daily has fallen from 14.9 per cent in 1993 to 11.8 per cent in 2007-08.

A cursory glance down a typical Hong Kong street may lead many to believe that fewer people are lighting up, compared with a decade ago. That is thanks, in part, to the smoking ban implemented in 2007 at all indoor public places that succeeded in ridding the city’s restaurants of cigarette smoke.

Hong Kong is also one of fewer than 20 countries or regions around the world where all cigarette packets feature graphic warning labels that convey on an emotive level the dangers of smoking.

Finally, the passing of a sweeping set of legislative amendments to the city’s smoking laws in 2006 generated substantial media interest. Yet, despite these measures, the anti-smoking lobby remains frustrated. Activists centre on how the city, once considered a trailblazer in the field of tobacco control, has been surpassed by more progressive jurisdictions.

Consider that, in the late 1990s, Hong Kong was seen as a model of tobacco-control policies following the passage in 1997 of sweeping reforms that virtually eliminated all but the smallest forms of tobacco advertising in the city. At the time, such a ban was not even in place in Britain, of which Hong Kong was still a part.

Fast forward a decade, and the situation is reversed. Four years after New York banned smoking from all enclosed workspaces, the so-called ban on smoking in “all” indoor public venues, implemented with much pomp and circumstance, was rife with extensions – for bars, bathhouses and mahjong parlours. Critics belittle the ban, and say it is continuing to fail in one of its chief aims: to protect catering and hospitality workers from second-hand smoke.

Against this backdrop, the reality – despite what some may perceive – is that the consumption of tobacco has risen steadily over the years. Latest Customs and Excise Department figures show that 3.79 billion cigarettes were sold last year, compared with 3.33 billion in 2006. In 2007, 3.49 billion cigarettes were consumed.

“Up until 1997, we were, arguably, the second best in Asia after Singapore, but after that, all the way up to 2007, we did almost absolutely nothing during that period,” said Judith Mackay, a senior policy adviser to the World Health Organisation.

“We did have legislation that went through and came into effect in 2007 which brought us a little bit more up to speed, but then we had all these ridiculous extensions,” she added, referring to the grace periods given to some businesses and the delaying of a ban on point of sale cigarette advertising until later this year.

“Both of those had extensions in the law and it made it less than perfect.”

But where Hong Kong really fell behind was in its failure to increase tobacco duty, despite the fact that it was widely considered to be the best measure to cut consumption, she said.

Before yesterday’s 50 per cent rise, the last time the government put up the duty was in 2001. In the 1990s, some of the highest tobacco tax increases were recorded.

Year after year, anti-smoking lobbyists called on the government to raise the tobacco duty, only to have their pleas ignored. Most recently, the publicly funded Council on Smoking and Health (Cosh) sent a petition, with around 4,000 signatures from people around the world, to Financial Secretary John Tsang Chun-wah urging him to raise the tobacco duty.

Hong Kong is bound, under the WHO Framework Convention on Tobacco Control – a global anti-smoking treaty which has been signed by Beijing – to implement tax or price measures.

Dr Mackay noted that even the mainland, the largest producer and consumer of cigarettes in the world, is considering using taxation to curb consumption. She said that Hong Kong had been “shockingly, critically and embarrassingly backwards” on raising the duty. “It’s really shameful.”

Aside from the bold step of a tobacco duty increase, Dr Mackay said that it was also important that the extensions, which will expire in June, be ended without further delay.

Furthermore, the government needed to hold out against putting smoking rooms in bars in Hong Kong, which had already spent HK$2.5 million of taxpayers’ money to study, she said.

While there has been some debate over the plan’s merits, putting a ventilated smoking room in every bar in Hong Kong was simply too expensive, and it would still fail to protect the health of the people who work at these places, Dr Mackay said.

“Somebody’s got to clean it, work in it, so it’s still not without risk.”

Finally, Hong Kong should consider plain packaging for cigarette packets, which would be a world first, and set prevalence targets, a measure not uncommon in other jurisdictions. Dr Mackay challenged the government to reduce smoking prevalence to 11 per cent for daily smokers by the end of 2010.

A spokesman for the Food and Health Bureau said the government agreed that taxation was one of the many effective measures to reduce smoking. He said the financial secretary considered all factors before making a decision. And he was adamant that the administration would make no exemptions in its planned implementation of the amendments to anti-smoking laws passed in 2006, including its plans to end the grace periods for bars and other places under the indoor smoking ban, and to eliminate point of sale advertising for cigarettes.

However, he said the government was still continuing its study on smoking rooms. No decision had yet been made, he said, and the government would report to the Legislative Council when it was ready.

At a conference on managing tobacco dependence, held by the Tobacco Control Office in Hong Kong last week, Secretary for Food and Health York Chow Yat-ngok acknowledged that, while Hong Kong had made progress in fighting smoking, more needed to be done. He made the comments shortly after the government unveiled an extension to its community-based smoking cessation programme, to include after-office hours and weekends.

Meanwhile, there have also been calls for the government to commit more resources to fighting smoking. James Middleton, the anti-tobacco committee chairman for lobby group Clear the Air, believes that the current resources allocated by the government to fight smoking are inadequate.

In the 2008-09 fiscal year, the government budgeted HK$47 million for the Tobacco Control Office to carry out its duties. The office employs 124 people, including 85 tobacco-control inspectors, to carry out enforcement, seven police officers, and various medical and clerical professionals. Meanwhile, each year, Cosh receives a dwindling subvention that stood at HK$11.3 million in the previous budget, down from HK$14.8 million in 2005-2006.

“The Tobacco Control Office has [85] inspectors to cover the whole of Hong Kong on two shifts. It’s totally inadequate. How can you do that?” Mr Middleton said.

Cigarette Stocks Gone in Puff of Smoke

Timothy Chui and Grace Tsoi – Hong Kong Standard – Thursday, February 26, 2009

Smokers eager for a pre-budget- priced nicotine hit cleared convenience stores across the territory of cigarettes yesterday.

News that the city’s tobacco tax was being increased by 50 percent – effective immediately – just before noon left stores short or sold out of cigarettes by early evening.

One store clerk said his shop was cleaned out of 2,700 packs, with buyers breaking brand loyalty to snap up all 40 or so brands on offer.

Street vendors also tried to make a killing by upping the price of pre- budget cigarettes before the 50 percent hike in tobacco duties announced by John Tsang took effect.

Tsang said tobacco duties would rise by HK$8 per pack, taking the total duty per pack to HK$24 from HK$16.

Last night Shau Kei Wan street hawkers were charging HK$37 a pack.

The duty hike will boost the goverment’s take from HK$3 billion to HK$3.8 billion a year, said a government source who put the number of smokers in the SAR at about 600,000.

He added that while progress had been made in making male smokers quit, younger female smokers were taking their place.

Professor Judith Mackay, director of the Asian Consultancy on Tobacco Control and senior policy adviser to the World Health Organization, called the budget’s only tax hike a “much- needed, overdue and timely increase.”

She said cigarettes were getting cheaper in real terms because tobacco duties had remained the same over the past eight years.

She added that every jurisdiction that increased tobacco duties saw declines in smoking rates, especially among the young.

Mackay said there was a 4 percent decrease in smoking rates for every 10 percent increase in tax, while a government source pegged the figure at 6.3 percent per 10 percent.

Anti-smoking group Clear The Air called for a doubling in manpower for the Tobacco Control Office, and said legislation should be passed to bind tobacco duties at no less than 80 percent of final retail costs to prevent tobacco companies from absorbing the hike.

A Japan Tobacco International spokeswoman does not see the number of smokers dropping after the tax hike. She pointed out that the average daily consumption during the early 1990s was steady despite a 200 percent tax hike in March 1991.

She warned higher taxes will lead to more cheap illegal cigarettes.

A Philip Morris Asia spokeswoman echoed the smuggling concerns.



爭氣行動聯同香港大學社會醫學系及 世界肺臟基金會的 Judith Mackay博士一直積極地游說衛生署,衛生事務委員會、食物及衛生局、立法會議員、財政司司長和本地傳媒,向他們強調香港政府的反吸烟措施嚴重不足並違反世界衛生組織烟草控制框架公約的要求。 自2001年起香港八年來從沒增加過烟草稅。

最近南華早報頭條報道在2008年合法的香烟銷售量比禁烟運動開始前(2006年)增加了13.8%。 上星期亞洲電視國際台的 ‘Inside Story’ 節目亦提到了爭氣行動、香港大學及世界肺臟基金會的有關工作。上述的策略,加上源源不絕向衛生福利及食物局局長、食物及衛生局及立法會議員提供世界各地最新的禁烟資料推動了特區政府在其禁烟政策上向前邁進一大步。我們希望此政策對中國大陸起到示範作用。另外,衛生福利及食物局局長週一岳和食物及衛生局已向特區政府力陳增加烟草稅是重要的公共健康措施。他們拒絕在此重要事項上讓步。




– 令成年烟民的數目明顯減少
– 令青少年烟民的數目明顯減少,從而防止青少年因受朋輩壓力去開始吸烟





禁烟範圍一定要擴展至機場和碼頭的出入口門外,餐廳、酒吧、建築物和寫字樓出入口20米範圍內。 另外,所有載有孩童的車輛以及全部的交通工具轉乘處(不論室外或室內) 都必須禁烟。



新的烟草稅預期能為政府在未來一個財政年度帶來46億港元收入。 可是,這預期收入仍然比政府現時花在與吸烟有關的疾病的醫療開支低8億港元。有關現象是不能容忍的,因為吸烟帶來的對健康的禍害是完全可以透過財政的手段來避免。我們特別要避免青少年開始吸烟以及二手烟引致的健康損害。




108. 另外,為了公眾健康,我建議即時把煙草稅稅率調高百分之五十。香煙的稅款會由每支約八角調整至約1元2角。我們亦會繼續加強推動戒煙及控煙的宣傳及執法工作。


與防止青少年吸烟委員會不一樣,爭氣行動、香港大學社會醫學系及 世界肺臟基金會及其成員均與烟草業沒有任何關連。如想進一步瞭解烟草公司資助這委員會的詳情,請瀏覽香港吸烟與健康委員會網頁:

爭氣行動是一個正式在香港註冊的志願組織, 致力改善香港的空氣質素。如需進一步的資料, 請聯繫:

Mr Michael Pieper, Communications Director Clear the Air Hong Kong

Professor Anthony Hedley , Department of Community Medicine University of Hong Kong

Professor Judith Mackay , World Lung Foundation

50% Tobacco Tax Increase

Media Release

Clear the Air (CTA), together with the Department of Community Medicine, University of Hong Kong (HKU) and Dr Judith Mackay of the World Lung Foundation (WLF) have actively lobbied the Department of Health, the Panel on Health Services, the Food and Health Bureau, Legco members, the Financial Secretary and the local media to show that Hong Kong Government’s anti smoking measures were seriously lacking and in breach of the requirements of the WHO’s Framework Convention on Tobacco Control Treaty. There has been no tobacco tax increase in Hong Kong for 8 long years since early 2001.

Recently the South China Morning Post published information on their front page provided by us demonstrating that the number of legal tobacco products consumed in 2008 was 13.8% more than consumed here in pre – smoking ban 2006. In the past week ATV World’s ‘Inside Story’ program aired a well timed documentary in which Clear the Air , HKU and WLF figured prominently; all the above strategies, combined with nonstop up to date worldwide anti-tobacco information provided to the Secretary of Health , the Food and Health Bureau and Legco members has now resulted in a significant step forward by the local SAR Administration which hopefully sets an example to Mainland China. In addition, the Secretary of Health Dr. York Chow and the Food and Health Bureau have demonstrated to the Administration the importance of increased taxation as an important healthcare measure and they have refused to compromise on this important matter.

50% Tobacco Tax Increase – 烟草税增加50%

The Financial Secretary today announced that the excise duty on tobacco products will be immediately increased by 50% to HK$ 24 per pack above the current levels of just over HK$ 16 per pack.

Whilst we have sought a 100% tax increase, Clear the Air estimates that the new increased tax will hopefully:

– Reduce current adult smoking significantly

– Reduce current youth smoking by a significant amount and prevent our non smoking youth starting their addiction due to peer pressure

The Hong Kong Administration must now capitalize on this tax increase and move towards making Hong Kong the world’s leading non smoking territory.



– 令成年烟民的數目明顯減少

– 令青少年烟民的數目明顯減少,從而防止青少年因受朋輩壓力去開始吸烟


Further Government action is needed

The tobacco taxation level must continue to increase year by year in line with FCTC requirements.

Smoking bans must be extended at all restaurant and bar premises to include the Outside Seating Accommodation and patio areas.

Smoking must be banned near airport and ferry entrance and exit doors, within 20 meters of restaurants, bars , building and office entrances , in vehicles carrying children and in all transport interchanges whether open air or enclosed.

The Tobacco Control Office staff needs to be doubled in order to enforce the new fixed penalty smoking offence scheme efficiently.

The Government must also legislate the excise taxation to be a percentage not less than 80% of final retail cost to prevent tobacco companies reducing prices to offset the increased taxation.

This new excise taxation level is reasonably expected to earn approximately HK$ 4.6 billion duties in the coming financial year but this will still trail Government’s healthcare current spending on tobacco related illnesses and lack of productivity by HK$ 0.8 billion ; this is unacceptable since the health damage due to smoking is totally preventable by fiscal means, especially to prevent youth from starting smoking and health damage by passive smoking.

The Government must now consider legal action against the tobacco companies as has happened successfully overseas, to recoup the immense costs incurred on the local healthcare system by these consumer products.

Tobacco products are the only ‘legal’ consumer products which kill their users when operated as directed by the product manufacturers.

Text of the Budget speech on Tobacco Tax:

Medical and Health

108. Separately, for public health reasons, I propose to increase tobacco duty by 50 per cent with immediate effect. The duty on cigarettes will increase from around $0.8 to about $1.2 per stick. We will also continue to step up our efforts on smoking cessation, as well as on publicity and enforcement in tobacco control.

Non competing Interests :

None of the above bodies nor individuals (CTA, HKU, WLF) has any links whatsoever to the Tobacco Industry unlike statements which recently appeared in the press from the Committee on Youth Smoking Prevention. For those people who are not aware of the history or tobacco company funding of this organization please refer to the Council on Smoking and Health website:


Clear the Air is a registered charity based in Hong Kong with the aims of improving the overall air quality in the Territory. For further information on this press release please contact :

Mr Michael Pieper, Communications Director Clear the Air Hong Kong

Professor Anthony Hedley , Department of Community Medicine University of Hong Kong

Professor Judith Mackay , World Lung Foundation

Tobacco Duty In HK To Rise By 50pc

BUDGET 2009 – Regina Leung – 1:52pm, Feb 25, 2009 – SCMP

Financial Secretary John Tsang Chun-wah on Wednesday announced an increase in Hong Kong tobacco duty by 50 per cent “with immediate effect” – saying it was needed for public health reasons.

Mr Tsang was unveiling new fiscal measures in his second budget address in the Legislative Council.

“The duty on cigarettes will increase from around HK$0.8 to about HK$1.2 per stick. We will also continue to step up our efforts on smoking cessation, as well as on publicity and enforcement in tobacco control,” he said.

There had been calls from health experts for the government to consider raising tobacco taxes in an effort to curb smoking-related diseases such as lung cancer.

According to customs statistics, a tobacco tax of 80 cents per cigarette levied in Hong Kong – unchanged since 2001 – makes Hong Kong cigarettes among the cheapest in the developed economies. It is estimated that over 6,000 people die in Hong Kong annually of smoking-related illnesses. Health experts are also concerned about the dangers posed by passive-smoking.

Mr Tsang said although the government’s fiscal position this year was likely to be weak, spending on healthcare would be boosted.

“The government will honour its pledge to increase healthcare expenditure to 17 per cent of recurrent expenditure by 2012,” he said.

“When the financing arrangements are finalised after the consultation on its implementation, we will draw an amount of HK$50 billion from the fiscal reserves to implement the reform” he told the legislators.

Mr Tsang said the government would increase Hospital Authority funding by about HK$870 million a year over the next three financial years.

“The annual subvention for the Hospital Authority by 2011-12 will be approximately HK$2.6 billion higher than now.

“I have also earmarked some HK$840 million for the next three financial years to implement various complementary measures to strengthen primary care services and the support to chronic patients, promote public-private partnership and develop a territory-wide electronic health record system,” he said.

He said the government would provide additional funding of about HK$19 million to enhance the care for people with disabilities.

Mr Tsang said that because of the growing ageing population, healthcare posed the greatest challenge to the public finances.

He said the Food and Health Bureau would continue with the second stage of a public consultation on healthcare reform.

Mr Tsang said more measures to support the development of food testing services were also planned.

“This will help Hong Kong to develop into a food testing hub in the region,” he added.

Three Jailed For Cigarette Smuggling

Loretta Fong – Feb 25, 2009 – SCMP

The former chairman of Hong Kong-based Nanyang Brothers Tobacco Co and two employees from another company were jailed yesterday for pocketing commissions and smuggling cigarettes to the mainland.

Nanyang Brothers, a subsidiary of publicly listed Shanghai Industrial Holdings, made the Double Happiness brand of cigarettes, the brand smuggled to the mainland.

In the District Court, Lu Dayong, 60, who has fled the city, was sentenced to 4-1/2 years in jail, and his lover, Ko Kit, 40, was jailed for 3-1/2 years. Ko was director of Hang Chun Trade Development.

The pair was found guilty of a joint charge of conspiracy to accept an advantage from a cigarette trader, Golden Leaf International Development. They received more than HK$7.5 million.

Chan Kai-san, 41, a Hang Chun sales manager, who was convicted of a count of conspiracy to defraud Nanyang Brothers, was jailed for two years.

In sentencing, Judge Joseph Yau Chi-lap said “corruption struck at the heart of commercial and public life”.

He said Hong Kong had become one of the most corruption-free places in the world, and unscrupulous individuals would not be allowed to ruin the hard work of officials over the past 35 years by offering or accepting bribes.

The court had heard that the offences happened between December 2002 and February 2004. The trio were caught on covert surveillance discussing the cigarette shipments or commission payments. Anti-graft agents found Lu kept a diary of the transactions.

In sentencing Ko, Judge Yau rejected the claim of her defence counsel, Joseph Tse Wah-yuen, who argued she did not benefit from the payments.

Judge Yau said that Lu, as the former chairman of Nanyang Brothers, seriously breached his fiduciary duty by defrauding the company. He said the amount of cigarettes smuggled was substantial because evidence showed there was a price war over cigarettes due to oversupply in Guangdong.

Judge Yau said the scheme was well-planned and highly sophisticated, which added gravity to the offence.