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Following is the transcript of the Chief Executive, Mr Tung Chee Hwa, at a question-and-answer session during the luncheon of the Joint Chambers of Commerce today (Thursday):

Question: Mr Chief Executive, ... How would you envisage marshaling a government effort to provide a multi-discipline and co-ordinative approach of housing, the environment and community development that can provide a better quality of life and sustainable neighbourhood that Hong Kong citizens would actually enjoy living at? And would this separate embrace of process that is more open and transparent, allowing affected and concerned communities to contribute to the planning process at a very early stage before the plans are gazetted?

Chief Executive: I think you should be over there instead of here. I made a point in the policy speech yesterday that it takes us 10 to 12 years to build the reasonable-sized highway, and the question is that could we shorten it. And that the urban renewal has taken us about 12 years. The question is: can we shorten it? So you have to balance between taking the views of the public, which is very very important, environmental considerations, legislative processes on the one hand. All these are very important. Together with other objectives of let's getting on with it. And I hope we would always be able to find the balance, and the balance will be found, and I promise you, I would make this time period much reduced. And we have discussed these issues internally and tried to see how we can move ahead. But you are right. This is important. The views of the public needs to be heard. I think so far as the environment is concerned, as you know the whole community is getting more and more aware about what sustainable development is all about, and as long as the whole community understands the importance of it; certainly I do and all my colleagues in the government do, as we move forward in our planning. This would be a very important part of our consideration, because if we are going to become a premier international city in Asia, as well as one of the leading cities of China, we need to do a lot more in these areas, and I promise you, we will.

Question: Sir, first of all, I like to congratulate you for keeping a promise last year which you had given to us in keeping a Hong Kong-US dollar peg rate .... Since last year, Sir, you have assured and Honorable Donald Tsang re-assured and re-assured several times that Hong Kong-US dollar link will remain. Now ... is it possible for you to promise at least for one year you can keep the Hong Kong-US dollar peg?

Chief Executive: The linked exchange rate is the fundamental policy of this government and this policy will not change today, tomorrow, next month, next year. It will not change.

Question: Mr Chief Executive, it's really my pleasure to have this opportunity to ask you a question. I am from the City University of Hong Kong. The fact that I like your speech yesterday very much because I think that you put most of the eggs and Hong Kong resources into the vision of Hong Kong, so that when we come out of this economic crisis, we will be ahead of everybody else. And you don't pay too much attention to the current problems. But on the other hand, you anticipate that there is really a fiscal deficit in the couple of years to come. Having said that, you also committed quite a lot of large expenditures on infrastructure, technology and all that. Would you promise that the equation will hold in a sense that the Hong Kong public will not face the severe fiscal deficit in the years to come? Thank you very much.

Chief Executive: Let me first say this: as we face difficulties today, the government needs to do as much as we can to find solutions to today's problems, and in fact all through the year, in February, March, April, June, August, the government has been taking steps to try to cushion the downturn of the economy, to ensure that there is no systematic damage to our economy as a whole. People have said, well you said very little in the policy speech. You can't wait for the policy speech to do all these things. You have to do it when it is necessary, when it is proper. So the government has been doing a great deal and I hope that the effects of these measures will come through in the course of time. So far as long term is concerned, it is important for us, particularly because we have difficulties today to have a long-term vision. And that is very very important. Whether you are a person, or you are a family, or you are a business, or you are a community or a country, there must be a long term vision. I tried to do this last year and this year I try to look at the changing environment and to see what else we need to do beyond what I suggested last year. Fiscal prudence is a hallmark of Hong Kong's success, and we are not about to change this principle. I am keenly aware that we are investing 235 billion dollars from 1997 to the year of 2001 in infrastructure projects which are vital to Hong Kong. And we have taken a very careful look as to whether we can afford these projects while at the same time maintain our fiscal prudence. In fact, I have to give credit to the Hong Kong Chamber of Commerce, which wrote to me, particularly to remind me: Mr Chief Executive, did you do that? I want to tell you we carefully look into it and we feel comfortable and confident that we will be able to do this. Our longer-term fiscal management will be based on growth of expenditure not exceeding the medium-term forecast of growth of our economy. This will continue. And I am afraid in the next few years to come, this growing expenditure may have to be reduced somewhat, but that is to be. Thank you.

Question: Thank you, Mr Tung. I am John Wong from the Hong Kong Marine Conservation Society. Last year at the same occasion here I asked about the quality of life, and I am glad that the Hong Kong government has done a lot to improve our environment and a lot of policies have done. But there is one issue that I like to ask about the SSDS, the Strategic Sewage Disposal Scheme. I just wonder whether the government would re-consider whether we should actually turn our waste into resource. If we can recycle our sewage affluent such as building a distillation plant, that will eliminate the costly water that we buy from China, and also we dump it into the sea so that is going to affect our marine life and that will eventually affect our own life too. I hope the government will consider recycle. We are preaching recycle and re-use. Now this is the chance for the government to show our community that we can put our waste into good use. Thank you.

Chief Executive: The first stage of our Strategic Sewage Disposal programme is well on the way, and obviously it cannot be changed. I think that clean water is very important to us, and subsequent stage of development, planning is still on-going. We are working closely with the Guangdong authorities to ensure that all the surrounding waters will be clean. So far as your particular suggestion is concerned, I must confess I do not know, I have no answer, but what I will do is to take a look at this, understand this a little bit more and then perhaps give you a response in due course.

Question: I am Anna [Soleman]. I just want to thank the Chief Executive for coming and explaining your vision to us. I think this is really great that there is a dialogue with the business, the private sector. But what I would have liked to see here is a few more government officials to be present, because I think pulling together our community I think the government and the private sector, the business especially, must have a closer dialogue, a closer relationship so that we have a better understanding of each other. Thank you.

Chief Executive: Thank you very much for your good suggestion. Of course Gordon, the Head of CPU, is sitting right over there. It is a good suggestion and I would take it up. I think I would like everybody to know that this Policy Address, written principally by Gordon and his colleagues, is in fact a product of teamwork, of many many people within the government at senior levels, at different levels, contributing to it, thinking about it, making sure that these are deliverables, and where we need to go, and so on so forth. So it is a tremendous team effort to come up with this particular Policy Address. Thank you very much.

End/Thursday, October 8, 1998

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Chief Executive's transcript at luncheon (Chinese part)