since my last Legco
Report to you on 14 June 1996, some Bills were satisfactorily
concluded in the rush before the end of July break for
the summer. The months of August and September would have
been uneventful except for the Diaoyu Islands incident.
I accepted an invitation from the British Trade Commission
and had made a sponsored trip to England in September.
The 4-days trip included visits to the Head Office of
the Chartered Institute of Public Finance and Accountancy
(CIPHA); ACCA; the Securities Institute; the Leicestershire
Chamber of Commerce; Loughborough University and other
national youth agencies as an accompanied VIP guest of
the Foreign & Commonwealth Office. Naturally I also
met some senior officials of their Hong Kong Department
and The Rt. Hon. Jeremy Hanley M.P. We exchanged cordial
and candid views on how England can maintain long term
relationships with Hong Kong's politicians post 1997.
The 1996-97 Legco session started off with a highly politically
charged Policy Address by our Governor. My response last
Thursday, a summary of which will be published and sent
to all members, was relatively restrained with lavished
words of encouragement particularly directed at the Civil
Service as a whole.
II . Committees and Panels
Accounts Committee (PAC):
I presented my PAC Report No. 26 in Legco on 10 July 1996
and the Chief Secretary (CS) responded on 9 October 1996.
Unlike Report No. 25, this time the exchange was extremely
civil with the CS accepting all my recommendations with
2. Financial Affairs
The Panel held 5 meetings (Agenda attached as Appendix
I) since the last report. I was again re-elected Deputy
Chairman on 2 October 1996.
I wrote an article on the taxation arrangements for using
a company to buy or sell properties, which was published
by Ming Pao. The Chairman took an interest in the article
and tabled it on 29 July 1996. The article, previewed
by Mr. Tim Lui (VP) and Ms. Winnie Cheung (TD), powerfully
argued against the use of tax legislation to penalize
investors' choice to use a company to buy or sell properties.
To date, the Inland Revenue Department has not made any
move despite press reports about its plan.
I assisted the President again to update Exco on the progress
of the proposed legislation on statutory protection of
auditors in late August. This item will be discussed under
item 3.5 of the Council's Agenda.
of Justice and Legal Services Panel:
The Panel held 4 meetings since the last report. No significant
business for HKSA.
4. Welfare Services Panel:
The Panel held 4 meetings since the last report with the
Comprehensive Social Security Assistance (CSSA) study
and the controversial consultancy review of the Social
Welfare Subvention System being highlighted.
On the sideline, I have resigned as Chairman of the Social
Welfare Advisory Committee in order to take chair of the
Hong Kong Council of Social Services, the umbrella professional
organisation of Hong Kong's Non-Government organizations,
which together provides about three-quarters of all social
welfare services in Hong Kong.
relating to the Formation of Parliamentary Friendship
The Group met once since the last report. No significant
6. Finance Committee and House Committee:
TD of HKSA kept informed of progress on all bills on a
weekly basis. No significant event.
I joined a Special Transport Panel formed to scrutinise
the Western Corridor Railway, which had met 10 times.
One of my direct questions exposed the fact that numerous
consultancy assignments had been awarded without tenders
and proper approvals by the KCRC Board of Directors. The
Administration is now conducting an in-depth enquiry and
will report back to this Panel. In the meantime, the Chairman
of KCRC resigned with a press report revealing that I
had declined to an offer for the job.
III. Bills Committees Joined
of Bribery (Miscellaneous Provisions) (No. 2)Bill 1995:
The Bill was passed on 10 July 1996 with Committee Stage
Amendments (CSA) on tax secrecy endorsed by HKSA.
2. Inland Revenue (Amendment) (N0. 4) Bill 1995:
The Administration has, for the time being, been holding
back this Bill to which HKSA had strongly opposed.
3. Evidence (Amendment) Bill 1996:
The Administration had provided CSAs to satisfactorily
address HKSA's concerns by excluding revenue legislation
from the scope of this Bill. However, there are still
other policy issues of fundamental importance on which
the Bills Committee will deliberate further before deciding
whether or not to support the Bill.
(Amendment) Bill 1996:
The Bills Committee met several times. However, HKSA's
Insolvency Practitioners Committee has shifted its position.
Nonetheless, I anticipate matters can be satisfactorily
resolved to balance the interests of all sides.
5. Inland Revenue (Amendment) (No. 3) Bill 1996:
Since the Bill offered to exempt from profits tax liability
in respect of non-residents' investment activities through
stock brokers and fund managers in Hong Kong, a HKSA Budget
Submission accepted by the Administration, I have lobbied
Legco not to delay its passage. HKSA's submission was
then dealt with speedily with the Administration's introducing
the appropriate CSAs and assurances on future actions.
The Bill was passed with HKSA's blessing on 10 July 1996
without a Bills Committee formed.
(Amendment) Bill 1996:
The Bills Committee met 4 times taking note of HKSA's
representations on 4 September 1996. Deliberations amongst
members still continuing.
7. The Orthodox
Metropolitanate of Hong Kong and South East Asia Bill:
This Private Member's Bill sponsored by me at the
request of the Church was first read on 9 October 1996.
The Administration and the House Committee of Legco have
both given this Bill their blessings, the Bill should
be passed without a hitch on 23 October 1996.
8. Professional Accountants Ordinance:
The Bills Committee on subsidiary legislation has
questioned whether or not our rules on Incorporation should
be regarded as subsidiary legislation requiring Legco
endorsement. The House Committee on 18 October 1996 had
agreed to pursue the matter further. The issue, if not
properly resolved, can have serious implications for HKSA.
I shall continue to brief this Council on further developments.
IV. Motion Debates
List attached as Appendix II. Speeches on my Web Page
and highlights will be published in my circulars to members.
I have asked 3 written questions (Appendix III) since
my last report.
VI . General Political Background
The Preparatory Committee has already laid down all the
rules of the Selection Committee, the Chief Executive
of the HKSAR and the Provisional Legco. In three months'
time, all the post-1997 team would have been chosen and
tracks laid for the immediate tasks in their hands. The
uncertainty factors of 1997 would have been removed to
a large extent and the business sector would know 'who'
to deal with and possibly 'how'.
The next few months is likely to be the most critical
time for a smooth changeover. Once the team designate
is in place, some controversial issues will re-surface,
e.g. press freedom, 1997-98 Budget and Mandatory Provident