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16th Legco Report to HKSA Council By Hon. Eric K.C. Li

I. Highlights
With LegCo in recess, overseas news dominate the headlines over the summer months. The unrest in East Timor, the Taiwan quakes and more recently, the 50th Anniversary Celebration of the People's Republic of China.

The economy had performed better and our GDP is back on a growth track. The Government was still cautious though and senior officials remained low key in breaking the news to the world. In any case, it is still not worth blowing any trumpet when compared with the faster recovery rates of many other Asian economies. Also quietly but surely, the Government speeded up plans to list the Mass Transit Railway Corporation and its own brand of unit trust in a Trackers Fund. These moves will bring billions to the Government's coffer which would help to balance the budget this year and possibly the next.

Short of good stories, the media made a big fuss of the Inland Revenue Commissioner's case. Accountants were given a short break though while the media's own self regulation and ethics had been put on the firing line. It showed that negative public sentiments now spare no profession from intense scrutiny. All the more reason for us to stay objective and very sensitive to public demands when tackling the controversial Securities and Futures Bill.

II. Committees and Panels
1. Public Accounts Committee (PAC):
@ The Committee held 26 meetings, including 11 public hearings to discuss PAC Report No. 32. During the public hearings, the Committee heard evidence from a total of 60 witnesses including 10 policy Bureau Secretaries and 16 Heads of Department.

The Committee drew many practical conclusions to help the Administration focus on the monitoring of public works, introducing good work practices and internal control, highlighting areas which are particularly vulnerable to possible corruption opportunities and the pursuit of privatisation and outsourcing. The Committee was particularly critical of the Administration for (1) allowing more than 20 years to elapse, while none of the five Central District footbridges, planned since the 1970s had been built; and (2) the laxed attitude in enforcing the law against obscene and indecent articles.

The widely publicised hearing of the China Light and Power case is continuing and preparatory works have already begun for PAC Report No. 33.

2. Financial Affairs Panel:
@ The Panel held 2 special meetings since the last report and the relevant agenda are attached as Appendix I. The first special meeting was held on the 7 September 1999 to study the method and schedule of consultation on the 2000-2001 Budget.

The second meeting was a special joint meeting with the Panel on Transport on the 4 October 1999 to receive a briefing on the legislative proposal to privatise the Mass Transit Railway Corporation.

A proposed list of future agenda items is attached as Appendix II for reference.

3. Welfare Services Panel:
@ The Panel held 3 meetings since the last report. The Panel studied the Neighbourhood Level Community Development Projects (NLCDP) - Policy and NLCDP Team in Tai O, Hong Kong Red Cross Report on the operation of the CSSA Scheme, the extension of grace period for sale of owner-occupied residential property and after school care service allowance for single parent families.

The Panel also focused on the CSSA issue, such as the Active Employment Assistance Programme, CSSA - review of requirements of disregarded earnings and the follow-up discussion on effect of tightening of CSSA on the elderly as well as the disabled and single parent families.

A Joint meeting with Home Affairs was held to discuss the effect of the proposal of "one school social worker in each secondary school" on youth services.

4. Economic Services Panel:
@ The Panel held 2 special meetings since the last report. The Panel discussed the follow-up on year 2000 compliance in Government, Government-funded and Government-regulated organisations under the purview of the Economic Services Bureau and received a briefing on the aircraft accident of 22 August 1999 at the Hong Kong International Airport.
5. Information Technology and Broadcasting Panel:
@ The Panel held 2 special meetings since the last report. The Panel mainly focused on the overall progress of the Year 2000 compliance exercise. It also examined the progress of the Cyber-port project and the progress report on the moratorium on the issue of further local fixed telecommunication network services licences.
6. Finance Committee and House Committee:
@ Owing to the adjournment of the Legislative Council, there was no Finance Committee meeting and only one meeting of House Committee held on 24 September 1999.

TD of HKSA was kept informed of progress on all bills on a weekly basis. The 1998/99 legislative programme dated 13 July is attached as Appendix III.

III. Bill Committees Joined
1. Revenue Bill 1999
@ This Bills seeks to amend certain Ordinances to give effect to the proposals in the Budget introduced by the Government for the 1999-2000 financial year, and for connected purposes. It was passed on 7 July 1999.
2. Banking (Amendment) Bill 1999
@ This Bill is to amend the Banking ordinance (Cap. 155) (the Ordinance) so as to: (a) bring Hong Kong's banking supervision framework in closer conformity with the core principle for effective banking supervision published by the Basle Committee on banking supervision in September 1999; (b) revise the provisions governing the publication and submission of annual audited accounts of authorised institutions; and (c) improve the operation of the Ordinance in the light of market developments.

It was passed without controversy on 7 July 1999.

3. Legislative Council (Amendment) Bill 1999
@ The major provisions in the Bill seek to amend the Legislative Council Ordinance in order to provide the electoral law for the second term of the Legislative Council. The Bills Committee held 23 meetings and also received submission from a total of 69 individuals and organisations.

I proposed an amendment to alter the electorates of the Social Welfare Functional Constituency, which was narrowly defeated. However, the particular amendment had raised hot constitutional issues which was widely reported and there were much debates amongst political analyst of its Basic Law (Article 74) implications. In the meantime, the Secretary for Constitutional Affairs had already indicated to me that the Government will be moving the Bill for me again in October as a Government Bill.

4. Protection of Wages on Insolvency (Amendment) Bill 1999
@ I was elected Chairman of this Bills Committee as a recognised 'neutral' lawmaker on labour issues. The Committee met twice since the last report. This Bill seeks to improve the ex-gratia payment to employees who are owed severance payments by their insolvent employers.
5. Telecommunication (Amendment) Bill 1999
@ There were 3 meetings since the last report. The objective of this Bill is to amend the Telecommunication Ordinance (Cap. 106) following the consultation on proposals set out in the consultation paper entitled "1998 Review of Fixed Telecommunications: A Considered View" issued by the Information Technology and Broadcasting Bureau in September 1998 with a view to: (a) enhancing competition safeguards; (b) improving interconnection and access arrangements to telecommunications services; (c) streamlining licensing procedures; and (d) providing the Telecommunications Authority with powers over certain technical areas.

This Bill is very controversial but represent a significant step of the Government in liberalising the telecommunications market. HKSA had made a submission which is being followed up.

6. Subcommittee on Resolution under Section 3 of the Dogs and Cats Ordinance (Cap. 167) and Dogs and Cats (Amendment) Ordinance 1997 (97 of 1997) (Commencement) Notice 1999
@ There were 4 meetings since the last report. The purpose of the Subcommittee is to seek the Legislative Council's approval of the Dangerous Dogs Regulation ("the Regulation") which provides for the control and regulation of fighting dogs, large dogs and known dangerous dogs. I received a number of representations from dog-owners within the Accountancy Functional Constituent and I will follow up their cause.
7. Subcommittee on Securities and Futures Bill
@ The Subcommittee is to study the major reform proposals under the Securities and Futures Bill prior to its introduction into the Council.

A series of 4 meetings were held and I had forcefully put the case of HKSA's very lengthy submission. I sensed an uphill battle with the major political parties all indicating support of the broad principles of the draft bill. However, the Subcommittee was persuaded to give HKSA some time to sort out the matter with the Administration and we should now be back on the negotiation table. There is no more time to loose and I have suggested a few lines to take to Mr. Nick Etches, our Task Force Chairman.

8. Subcommittee on the Five Resolution made under Section 4 of the Mutual Legal Assistance in Criminal Matters Ordinance (Cap. 525) - Mutual Legal Assistance in Criminal Matters (United States of America) Order
@ The 2nd meeting of the Subcommittee was held on 20 September 1999. In response to HKSA's representations, the Administration confirmed that the various provisions in the Mutual Legal Assistance in Criminal Matters Bill previously proposed by us are not modified by the Order and will apply to US requests. I have also passed the Administration's response to our points raised on double criminality and the vagueness and potential scope of the offences covering export control etc. to the TD. It seems to me that we should have no major objection to the Order after clarification is sought.
V. Motion Debate
List attached as Appendix IV. Speeches on my Web Page and highlights will be published in my circulars to members.
VI General Political Background
The Chief Executive will deliver his Policy Address tomorrow. It is generally expected that the Address will be quite short and that he will focus on tackling 'softer' issues like environmental protection; restructuring of Urban Services; education reforms and youth policy objectives; financial markets reform and plans to develop our infrastructure and tourism industry. The Business Sector will also be looking for signs of a more upbeat economy.

The District Board election to be held on 28 November 1999 is heating up. The popularity of different political parties will again be tested. The Administration is likely to face a harder time than usual as political parties will be even more picky in order to attract publicity.

With some of the energy of political parties channelled to the District Board elections, the rest of us will need to concentrate on the scrutiny of the many important Bills coming on stream.


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