Following is the transcript of the question and answer session by the SAR Chief Executive, Mr Tung Chee Hwa, at the luncheon meeting of the Australian Chamber of Commerce today :

Question: Mr Tung, my name is Jim Thomson, I'm with a company called Crown World-wide. First of all, before I ask my question of you, I want to say you're very popular in our house: my wife loves your face; my son loves your haircut; and I love the fact that you're a 49er fan - you can tell I'm not Australian. But my question really is, what do you think the chances are the Corporate Profits Tax will be reduced after the debate that's going on now?

Mr Tung: Since I started the political career in September last year, your wife should know that my hair has turned completely grey, I was much better looking before. I think it is early to -- too early to speculate on this issue. Many of these are very fundamental questions, are being examined by all of us together, and in due course you will know the answer. I think it is important to recognise that we will continue a very prudent fiscal policy, which is one of the reasons of our very success, and we will continue to do that. But on the other hand, there is a tremendous surplus and therefore we have to think very carefully how best to use the surplus. Some of it in special areas of services, or providing a greater incentive in reducing taxes. Or others may be used in investments to make Hong Kong more competitive in areas of infrastructure, and so on so forth. So we would be looking at all these things very carefully and I know Donald and his colleagues have been looking at this already.

Question: Mr Tung, my name is Robert Teale, I'm from a ... company, with its managers of P & A .... The question I want to ask, I think it's rather personal to some of us, like myself, the Australian, and we are Hong Kong residents, or permanent residents as well. At the moment, although we are Hong Kong residents, when we travel to China we still required a visa. Since Hong Kong now is part of China, I want to know whether there is any changes in this policy that we still need a visa, or can we travel to China without our Identity Card? If not, could you bring up the matter with the Chinese, as we are now part of China in Hong Kong. Thank you.

Mr TUNG: Well, I think the real issue is this: if you are travelling on an Australian passport, it means although you are Hong Kong residents you are travelling on an Australian passport into China, you know, then you would need a visa. But if you travel to China on a, what do you call this in English (speaks in Chinese) -- what's (speaks in Chinese) -- home visiting permits, then you just get a permit and you travel back into China, and this is a book, it's a multi-entry book which you can use, but then you do it as a permanent resident of Hong Kong, not as Australian citizen, so you first have to make that choice.

Question: Hello, Mr Tung, my name is Carol Mayor, from Texon, the makers of those great bus shelters. My question to you is, you've been in the job for a month now, and are there any serious worries that you have, or do you think it's actually going well?

Mr Tung: Of course, I took on the responsibility on December 11, organising various aspects of the Government, the Executive, the Legislative and the Judiciary, the different branches of the Government, and insofar as the last month is concerned, I would say this, that it's a lot of hard work, it's very much what I expected. I look forward to go to work every day, I'm in good health, enjoy the work I'm doing. We have been -- it's been a very good month, or a very good seven months, because basically the Central Government very much want Hong Kong to succeed, we want one country, two systems to work. The people of Hong Kong very much want one country, two systems to work, and there's enormous goodwill around the world. All want one country, two systems to work, so there's a fair wind behind me and they make my work much easier. I think I'm optimistic that -- although these are early days yet -- but I'm optimistic that Hong Kong will do very well under one country, two systems. And as I said in my speech, this has only been the first month of really putting into practice one country, two systems and I believe this month is a very important month, because we are now putting this into practice and it's going well - very, very well indeed.

Question: Mr Tung, Stewart McGreig is my name, San Miguel Brewery in Hong Kong. You've made some comments in recent days about your first month, in relation to Hong Kong's exposure to property and the property market. You've also made references to industry and the need to -- for industry to develop. We have a system now where it costs Hong Kong manufacturers significant sums of money in duty payments to export or move product to the Mainland. What action do you foresee in relation to eliminating some of those barriers to trade with the Mainland? Thank you.

Mr Tung: I think insofar as housing is concerned, the real issue is really a supply-side issue. We -- the only way to tackle rising prices is to provide adequate -- a long-term adequate supply of housing, and I'm very determined, my colleagues in the Government, they're very determined to make sure that our long-term targets can be met, which is producing 85,000 units of houses which is, at the end of 10 years, 70% of Hong Kong people who live in units which they own. Right now, we are at about 51%. And it is important we achieve this objective, and I have every confidence, every reason to believe this is possible, because fundamentally there is land in Hong Kong. And secondly, we have the financial resources in Hong Kong, and I think now we have the priority as well as the determination to make it work, and it will happen. Insofar as exports into China is concerned, I think the bigger picture is, of course, the WTO discussions that is now ongoing, and I certainly hope China will get into WTO as early as possible. In the meantime, it is always very tempting to say to China, "Give us special favours here and there". I would hope that we can really work very hard ourselves and -- instead of asking for special favours on taxes and so on so forth. Let's wait for the evolution of the big picture - the WTO negotiations - which I think will be helpful to all of us.