Mr Murray
Mr Cortazz
PS/Lord Goronwy-Roberts
SECRET
HONG KONG: BUDGET FOR 1977/78
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Mr. Merr Mr skapast foll
At his meeting with the Governor of Hong Kong and the Financial Secretary on 9 December last, Lord Goronwy-Roberts
asked for as much detail as possible of the Hong Kong Government's Attached thinking on the Budget for 1977/78 three weeks in advance of
Flag A Flag B With Head
UC HKD. which I received from the Governor on 10 February, three weeks
Budget Day (Part 2, paragraph 6 of the record of the meeting). I
now attach a copy of the Hong Kong SECRET & DEDIP telegram no. 155
precisely in advance of the Budget statement on 2 March, containing a detailed preview of the Budget estimates.
2. At his meetings with Lord Goronwy-Roberts in July and
December last year, the Governor maintained that if he were to provide
a preview of the Budget it would not be open to negotiation with
the Office. He was not pressed on this point. It follows,
therefore, that if we were to be dissatisfied with the Budget it
would be very difficult to advise the Hong Kong Government to
reconsider it. Needless to say, the Governor's telegram contains
no invitation to offer comments.
3. I have gone through the Budget preview in the light of the guidelines that Lord Goronwy-Roberts put to the Governor and the Financial Secretary in December (Part 2, paragraph 6 of the record of the meeting). I draw attention to the following points.
Revised Estimates 1976-77
4. The estimates showed revised revenues of $HK7,400 millions
and expenditures of $HK6,843 millions, giving an estimated surplus of $HK557 millions. The Budget provided for a deficit of $HK355 millions. The difference is explained mainly by significant under-spending on the public works programme. The Hong Kong explanation of this is that the Government are competing for the services of contractors with the Mass Transit Railway Authority.
SECRET