Two days after my last report on 19 December 1996, I was elected a member of the Provisional Legislature. I am pleased to note Council's decision to maintain a close working relationship with me in that new capacity after 1 July.

Hong Kong entered the year of 1997 in expectation and mourning. The Chief Executive of HKSAR named his full line-up of executives and patriarch Deng died. Instead of giving Hong Kong the long anticipated tremor, these important historic events went by in a relatively calm atmosphere. With much of the political uncertainties now removed, the Financial Secretary (FS) lost little time in announcing a record HKD 31.7 billion surplus for 1997-98 and an enormous HKD 360 billion reserve. The transitional Budget, glimmering in gold, echoed strongly the lavish words of confidence from celebrities of the International Monetary Fund (IMF) held in Hong Kong just the week before. In response, should the accountancy profession join the chorus of 'feeling good' or the 'off-key' criticisms of the FS's misery? Council's views welcomed!

On a more personal note, I submitted two successive articles stating my stance on 'the Selection Committee' and 'the Provisional Legislature' to the Hong Kong Accountant. The first already appeared under LegCo Column in the last issue and the other one awaiting publication.

II. Committees and Panels

1. Public Accounts Committee (PAC):
The PAC met a total of 15 times before I tabled the PAC Report No. 27 in LegCo on 29 January 1997. The Committee reached consensus on all issues despite of the fact that the report contained some highly controversial recommendations e.g. removal of the Commissioner of Police from his government quarter.

I met the UN High Commissioner for Refugees on 10 March 1997 in LegCo and pressed the case on behalf of Hong Kong for the return of the HKD 1.1 billion loan.

2. Financial Affairs Panel:
The Panel held 4 meetings (Agenda attached as Appendix I) since the last report. The Panel studied the Insurance Companies (Amendment) Bill 1997 and concluded that a Bills Committee was not necessary. I confirmed with TD subsequently that HKSA would not make a submission. The Bill will be tabled for Second and Third Readings before the end of this month.

3. Administration of Justice and Legal Services Panel:
The Panel held 8 meetings since the last report. The use of Chinese in Courts was extensively discussed. No significant business for HKSA.

4. Welfare Services Panel:
The Panel held 5 meetings since the last report. The discussion on the arrangement to relax the 'Absence Rules' for elderly recipients was widely reported. No significant business for HKSA.

5. Matters relating to the Formation of Parliamentary Friendship Groups:
The Group met once since the last report. No significant business for HKSA.

6. Finance Committee and House Committee:
TD of HKSA kept informed of progress on all bills on a weekly basis. There were 8 meetings of Finance Committee and 7 meetings of House Committee. I took side with the Administration and successfully lobbied for the passage of funds to sustain the Office of the Mandatory Provident Fund.

7. Special Transport Panel:
The Panel held 2 meetings since the last report. The high-priced Western Corridor Railway is proceeding quietly away from political limelight.

III. Bills Committee Joined

1. Independent Police Complaints Council Bill (IPCC):
I attended as Vice-Chairman of IPCC and protracted discussion continues on the best way to reorganize IPCC.

2. Securities and Futures Commission (Amendment) (No. 3) Bill 1996:
After a long wait at the bottom of a long queue of Bills, the Bill is gradually surfacing again as the result of extra efforts put in by LegCo to clear all the backlogs before handover. Meanwhile, the Law Reform Commission has written to LegCo to communicate its hesitation in supporting the Bill.

3. Subcommittee on Travel Industry Compensation Fund (Amount of Ex Gratia Payments and Financial Penalty) (Amendment) (No. 2) Rules 1996:
The Subcommittee met once and rejected a suggestion from the Democratic Party to raise compensation to travellers in the case of defaulted outbound tours from 90% to 100%.

4. Social Workers Registration Bill:
This Bill seeks to create a statutory council to register professional social workers. I attended as Chairman of the Hong Kong Council of Social Services (HKCSS) and was elected Deputy Chairman of the Bills Committee. LegCo members also valued my input because of the experience I gained in managing professional and statutory organisations.

5. Child Care Centres (Amendment) Bill 1996:
This Bill seeks to certify and control childminders operating small private centres. I attended as Chairman of HKCSS and former Chairman of the Social Welfare Advisory Committee (SWAC) which helped to shape the Bill.

6. Medical Registration (Transitional Provisions) Bill 1997:
In response to the Medical Council's decision to hold unified examinations without granting a transition period to some Hong Kong students now studying overseas, the Hon. Selina Chow has moved a Private Member's Bill to legislate for a transition period against the wishes of the medical profession.

I decided to support the Private Member's Bill not only because it is the right thing to do, it is also important for our own students to feel absolutely sure that they would not have to face the same predicament when we begin to implement our own independent examinations. The LegCo representative of the medical profession, Dr. the Hon. C.H. Leong, has acknowledged my position and there should be no adverse repercussion on our future co-operation with the medical profession.

IV. Motion Debates

List attached as Appendix II. Speeches on my Web Page and highlights will be published in my circulars to members.

V. Questions

I have asked 3 written questions (Appendix III) since my last report. They are on corporate governance, MPF and tax collection respectively. The relevant HKSA Committees may wish to be advised and to consider the replies further.

VI. General Political Background

It seems that all eyes are on the Chief Executive of the HKSAR in the next few months before the handover. Needless to say, Mr. Tung will have a difficult act to play particularly in how he balances his powers with the Preparatory Committee and the Provisional Legislature . China is still likely to play an active referee role in this process behind the scene for some time to come.

JLG negotiations are likely to shift to high gear as practical results would be urgently needed. It is apparent that diplomats from both sides would wish to keep political wrangles to the negotiation table and not through media microphones. In place of political debates, celebration activities may begin to dot the media headlines.

The Subcommittee of the Preparatory Committee Studying the Formation of the 1998 First Legislature is likely to come up with a final decision in principle by late May. It seems that current thinking is to leave the Accountancy Functional Constituency untouched but a follow up letter from HKSA to restate our case is still useful during the month long consultation period ending 31 March. I shall keep the matter in view as a member of the aforesaid Sub-committee and Council might like to think about a voters registration drive soon afterwards.

Encl.