XN000022-1996-10-30 — Page 24

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The Post Office Trading fund was established on 1 August 1995. Its target rate of return is 10.5% of ANFA. In 1995-96 it achieved 8.8% and we expect it will achieve its target rate this year.

The Electrical and Mechanical Services Trading Fund was established on 1 August this year, with a target rate of 13.5%. We do not anticipate that it will be able to meet this in 1996-97, but in due course it will.

Accountability

Lastly, I would like to come to accountability arrangements.

There is also no question of Trading Funds operating without public accountability. In addition to setting out the controls exercised by the Financial Secretary and the relevant Policy Secretary over a trading fund's operation, the Trading Funds Ordinance also requires the tabling of annual reports and audited accounts each year in this Council. Members will by now have had the opportunity to study the reports and accounts for 1995-96.

In the interests of transparency and obtaining Members' views it is also the Trading Funds' practice to brief or report to the relevant Legislative Council Panels on their activities.

I have already mentioned that we are working with the trading funds to improve the range and balance of performance measures available, and this can only serve, over time, to improve accountability.

Conclusion

To conclude, I think it is fair to say that the overall review of operation and cost-effectiveness of trading funds that is at the heart of this motion is in fact something that Government has already carried out and will continue to perform regularly in future. The evidence is that the trading funds established to date have delivered significant benefits, but we, and the management teams within the trading funds are by no means complacent. The search for improvements in services, and indeed in the way that the trading funds themselves are operated, will continue.