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Following is a speech by the Chief Secretary for Administration, Mrs Anson Chan, in introducing the Government Minute in the Provisional Legislative Council today (Wednesday):

Madam President,

Laid on the table today is the Government Minute responding to Report No. 29 of the Public Accounts Committee. To mirror the hard work of the Committee, we have expedited the preparation of the Administration's response to ensure that it is available to Members before this Council rises. The Minute sets out the measures the Government has taken, or is planning to take, on the conclusions and recommendations contained in the Report.

The Hon Eric Li, Chairman of the Public Accounts Committee, spoke in this Council on February 11, 1998 when tabling the Committee's Report. I would like to respond to his remarks.

First of all, let me echo his view that the Public Accounts Committee has a track record in assisting the Administration to improve the high standards of accountability in the management of public finances. This fine tradition derives from the close and co-operative working relationship that has developed between the Committee and the Administration over the years.

As can be seen from the Government Minute tabled in this Council today, the Administration has made significant progress in the majority of the matters outstanding from the Committee's earlier reports. For example, we have reached agreement with the Hospital Authority on a revised funding arrangement for its staff on-costs in order to meet over time the principle of overall cost comparability between the Hospital Authority remuneration package and that of the civil service, a matter extensively investigated and reported by the Committee in its Report No. 25A. We have, introduced improvements to the administration of the Local Student Finance Scheme and the Government's passage arrangements. And we have successfully reformed the management of the Public Cargo Working Areas.

Let me now turn to some of the specific points made by Mr Li about Report No. 29.

On the action taken by the former Hong Kong Government in the implementation of the 1988 Defence Costs Agreement, the DCA, we are disappointed that, despite the full account we have given the Committee in the course of its investigation, the Committee did not feel able to accept the unique nature and circumstances of the DCA or the distinction between negotiation tactics and matters of substance. The Administration is of the view that it should be clear from the detailed account we have given about the DCA negotiations that, through its unrelenting efforts, the former Hong Kong Government had obtained what was a very satisfactory outcome for Hong Kong. Nevertheless, I do appreciate the concerns of the Committee. In particular, I note Mr Li's suggestion that the Finance Committee should take up with the Administration the question of putting in place a proper mechanism of disclosure to ensure that the executive is answerable to the legislature. We will of course be willing and ready to co-operate with the legislature on this.

As regards Mr Li's constructive remarks about the planning and use of Government accommodation and, in particular, about the role of the Government Property Agency, I can assure him that we all recognise that we should make the best use of the Government's estate and the sites allocated for Government, Institutional and Community, that is GIC use.

In this respect, the Secretary for the Treasury has recently briefed Members of this Council in the context of the Budget discussions that one of his major initiatives in the coming year is to optimise the use of the Government's estate and GIC sites. With the staff enhancement approved by Members in the 1998-99 Estimates, the Government Property Agency will be able to assume a more proactive role in helping him in these pursuits.

Mr Li has also commented on our subvention arrangements, a recurring theme in the Committee's deliberations. In responding to the Committee's Report No. 28, I said that I agreed entirely with Mr Li that the Administration must ensure that we obtain good value for the money that are provided to publicly-funded bodies. However, we must strike a balance between proper control of public money and allowing those organizations adequate flexibility in resource management. We will continue to adopt these principles in managing the subvention arrangements with publicly-funded bodies. As regards the two specific subvention issues relating to the University Grants Committee-funded institutions, namely the introduction of a home financing scheme for eligible staff and the requirement of heads of institutions to pay rent, Members may be pleased to know that we are pursuing the Committee's recommendations in close consultation with the UGC funded institutions.

Finally, let me comment on the administration of the funding schemes for promoting technological development in industry. I wish to assure this Council that we will make every effort to improve the management of these schemes so that we can effectively deliver the Chief Executive's pledge to make Hong Kong an innovation centre, not just for ourselves, but for Southern China and the region as a whole. Only a few days ago, we have reported the findings of our review on the Applied Research and Development Scheme and the Co-operative Applied Research and Development Scheme to the Finance Committee. I am grateful for the Finance Committee's support and approval for the revised arrangements to ensure more effective management of the Schemes as well as the additional grant of $500 million.

Madam President, I wish to express my sincere thanks to the Chairman and Members of the Public Accounts Committee for their painstaking work. We look forward to continued partnership with the Public Accounts Committee in the new session of the Legislative Council.

Thank you, Madam President.

End/Wednesday, April 1, 1998

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