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3rd Legco Report to HKSA Council By Eric K.C. Li

I. Highlights

The second quarter of 1996 was filled with HKSA submissions to Legco. Consequently, I have got quite bogged down with committee work and hard lobbying in and out of Legco's Chamber. Naturally, hard work finally pays in terms of favourable results, as you will see in this report later. As Chairman of the Public Accounts Committee, I have started work on the second Director of Audit Report. But my role as the top watchdog of public finance does not stop there. The recent article I wrote on the controversial Western Railway Project has received massive and unanimous support from the media and Legco, which has directly led to the enhanced transparency and closer Legco scrutiny of this hugely expensive project with an estimated price tag of $90 billion.

On the Preparatory Committee (PC) front, the speculation of the future Chief Executive is taking flight as potential candidates gradually emerge. I stood steadfastly neutral and scrupulously non-speculative in the matter.

II. Committees and Panels

1. Public Accounts Committee (PAC):

The motion debate on the "access to Exco papers" that I sponsored during the Legco meeting on 24 April 1996 was a major victory. Despite some government opposition, all the major political parties and most independent members supported my motion except two pro-China candidates, i.e. 1 opposed and 1 abstained. Media reports were also overwhelmingly supportive of my case for greater accountability by Exco to the PAC. An article will appear in the May/June 1996 issue of the "Hong Kong Accountant' under the Legco Column, an advanced copy together with the wordings of the motion are attached as Appendix I.

I received the second Director of Audit Report No. 26 on the same day of the motion debate and; the PAC has already met more than twenty times including breakfast and lunch meetings. The PAC report is taking final shape and I will have some original and interesting remarks to make when it is presented by me to Legco in early July.

2. Financial Affairs Panel:

The Panel held another three meetings (agenda attached as Appendix II) since the last report. No significant event. Outside the Legco Chamber, I have assisted the President in lobbying the Exco to delay the proposed legislation on statutory protection of auditors. It seems that we have got a sympathetic Exco hearing and a six-month break. The matter took a slightly surprising turn when Mr. Peter Wong, our representative from the Chinese Chamber of Commerce, told reporters during the latest meeting of the Economy Sub-group of the PC on 25 May 1996 that he will take our case to the said Committee. The issue has not been raised in the PC to-date.

3. Administration of Justice and Legal Services Panel:

The Panel held another five meetings since the last report. The Administration decided to abolish scale fees of solicitors and the exclusive rights of audience in the High Court by barristers. These decisions were bitterly opposed by the affected branch of the legal profession. Although HKSA's previous stance taken at the time of public consultation was mildly supportive of the Administration's proposals in principle, I would seek your understanding to take a more flexible stance in view of the highly emotive nature of the issue and our close relationships with both the Law Society and the Bar Association.

4. Welfare Services Panel:

The Panel held another 4 meetings since the last report. You may be interested to note that a Social Workers Registration Bill will soon be introduced to Legco to formally recognise the professional status of social workers. The Consultancy Review of the Social Welfare Subvention System which seeks to replace the existing subvention system based on established costs by a lumpsum grant is now meeting heavy resistance.

5. Matters relating to the formation of Parliamentary Friendship Groups:

The Panel held one meeting since my last report. We met Rt. Hon. Robin Cook, Shadow Secretary of State for Britain on 1 May 1996. I also attended the 8th Commonwealth Parliamentary Seminar from 12-18 May 1996 in Hong Kong.

6. Finance Committee and House Committee:

No significant event except Government's proposals to inject funds into the Tradelink project and a study on electronic road pricing were passed. TD of HKSA being kept informed on progress of all bills on a weekly basis.

III. Bills Committees Joined

1.Prevention of Bribery (Miscellaneous Provisions) (No. 2) Bill 1995:

Since my last report, the Administration and the Bills Committee had all agreed on the detailed Committee Stage Amendments proposed by me to better safeguard the secrecy of IRD records. TD of HKSA consulted and she also indicated her full acceptance. The Bill still drags on after more than twenty meetings because of other unresolved issues.

2. Medical Registration (Amendment) (No. 2) Bill 1995: Completed.

3. Sub-committee on Legislation for the Mentally Handicapped:Completed.

4. Road Traffic (Amendment) (No. 3) Bill 1995

Eastern Harbour Crossing Road Tunnel (Passage Tax) Bill Inland Revenue (Amendment) (No. 4) Bill 1995
I have informed this Council of my efforts of lobbying to vote this Bill down in its entirety during my the last report. HKSA strongly opposed to the case of using tax penalty for traffic control purposes. Upon our impressive submissions, the Bills Committee unanimously rejected these Bills and had asked the Administration to withdraw them or face a total defeat when put to the vote. The Administration is now lobbying the Democratic Party to see if she can change their minds. Bills Committee ceased its work on the Bill pending Administration's further decisions.

5. Evidence (Amendment) Bill 1996

I was elected Chairman of the Bills Committee and heard HKSA's submission. The Administration is now seriously considering the matter with a view to giving us a positive response.

6. Bankruptcy (Amendment) Bill 1996:

I was elected Chairman of the Bills Committee and heard HKSA's submission. The Administration is now seriously considering the matter with a view to giving us a positive response.

7. Bills Committees joined but on waiting list:

Inland Revenue (Amendment) (No. 2) Bill 1996

Inland Revenue (Amendment) (No. 3) Bill 1996

Companies (Amendment) Bill 1996

Insurance Companies (Amendment) Bill 1996

8. The Eastern Orthodox Church - a Private Member's Bill:

I have been invited by Bishop Athenagoros, who was introduced to me by the Right Rev. Peter Kwong, Bishop of Hong Kong and Macau, Sheng Kung Hui, to introduce this Private Member's Bill. The Bill will create a statutory body to hold all the Church's properties and operations in Hong Kong. The final draft is now being studied by the Administration.

IV. Motion Debates

List attached as Appendix III. Speeches can be accessible on my Web Page and the highlights will be published in my upcoming circulars to members.

V. Questions

Since my last report, I have asked another four written questions (Appendix IV). More are in the queue.

VI. General Political Background

As we approach the final year of the countdown to 1997 and the PC is in full swing, the UK has turned their attention to the international arena to foster a positive case for their handing Hong Kong over to China. The dialogue between the people of Hong Kong and China has become much more direct with the usual ups and downs. China has also begun to take international opinion more seriously with Director Lu Ping making more overseas trips. I expect the relationship between China and the UK will turn better in the third quarter of 1996 with some minor breakthrough. Otherwise, it is going to be a quiet summer with everyone in politics making overseas trips, bearing in mind that we probably cannot do the same next year!

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