Madam President,

Tabled before the Council for Members' information is the Report of the Director of Audit on the Accounts of the Government and the Trading Funds for the period from April 1 to June 30, 1997. These three-month accounts are compiled and audited in order to demonstrate in an accurate and transparent manner the overall financial position of the Government immediately before the establishment of the Hong Kong Special Administrative Region (HKSAR).

For the three months ended June 30, 1997, the accounts of the Hong Kong Government excluding the Lotteries Fund showed a consolidated surplus of $10.6 billion, bringing the fiscal reserves to $184.2 billion as at the end of June 1997. For the same three-month period, the Lotteries Fund recorded a surplus of $134 million, while the net assets of the six trading funds totalled $14,252 million at the end of June 1997.

Thanks to the long-established prudent management of our public finances, these audited accounts show that the HKSAR Government began on a sound and healthy financial basis.

With these remarks, I would like to invite members to note the contents of the accounts tabled.