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Governor: I very much agree with what you said, Mr Chan, about the debt which the whole community owes to older people who built our success and prosperity today but very often were not in a position to save themselves for their own future. We have in fact increased benefit rates for elderly people I think pretty sharply over the years. We have introduced new measures like the Chinese New Year special grant of $200 for elderly recipients. We are spending, I think I am right in saying, this year, over 50% more, after allowing for rises in prices, on things like the Health and Welfare Services for the elderly as well as financial assistance, special flats for the elderly, reduction of elderly waiting time for public housing and so on.

It is absolutely imperative that we do provide better for the elderly. Some people call that welfarism. I can't really understand that since we can well afford it. I think it is a recognition of our responsibilities to the senior citizens in our community who have made such sacrifices for Hong Kong's prosperity today and I totally take your point that whatever we have done in the last four years, we should set our sights higher and try to do even more. I hope that the introduction of the Mandatory Provident Fund and the, as it were, private schemes for people's retirement will mean that in the future government does not have to do as much because everybody will have been encouraged to do more for themselves.

Question (Mr Ho): I would like Mr Governor to respond to what I want to say. Of course please wait until I finish. Mr Governor, you said that appointments do not have credibility. But then you are also appointed by the Queen herself and then the Letters Patent and the Royal Instructions are not documents of credibility. You said that the Provisional Legislature should be reprimanded but then I believe you yourself, and the Queen, should be reprimanded because you did not admit to the seven letters that have been exchanged.

And also, the British Government also stopped the talks between the British side and the Chinese side unilaterally, and also, because of the political reforms, and that is why we need the Provisional Legislature.

And also, in the present Legislative Council there are 16 people who have dual nationality and who have a passport of a foreign nationality. You said that this would abide by the Basic Law but this is wrong because it is in contravention to Article 17 of the Basic Law.

The fourth point and the last point, Mr Governor, you went to America to criticise the Provisional Legislature but you did not mention the seven letters and also you did not mention the political reforms. You actually misled the Hong Kong international community. The Chinese side have already explained what they mean by three contraventions and why they need the Provisional Legislature. But then, Mr. Governor, you turned away from it, you bucked the issue.

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