and on any amount over that sum at 5% per annum. Government does not require repayment of capital, and the capital repayment element of rental income is therefore available for further development, or for reducing withdrawals from the fund, thus keeping interest charges to a minimum. These new financial arrangements allowed the Authority greater freedom of action and were simpler to operate than a system of loans for individual projects. The financial climate thus seemed 'set fair' for the foreseeable future, provided that the fund could be augmented from time to time.
49. In 1959, the fund was indeed increased by $47.5 millions, to a total of $139 millions, to permit financing of the Choi Hung Estate scheme, the balance of the estimated capital cost of $52.5 millions to be met by the Authority. In June 1960, the fund was again increased by a further $17 millions, to a total of $156 millions, to allow the Ma Tau Wai Estate scheme to be financed.
50. At the same time, Government informed the Authority that this would be the last increase under the present terms for borrowing, as the Colony's financial position was such that Government could not contemplate lending additional money for housing on those terms, and if further money could be made available, it would have to be at market rates. Government's decision was a serious one for the Authority.
51. The position was made clear to the public on 1st March, 1961, when the Financial Secretary, at the Budget Meeting of the Legislative Council, said that no further funds would be made available for the Authority's use, over and above the sum already approved. He said that neither the Authority, nor the Housing Society (which is operating in much the same field), had done very much to provide for the housing needs of those with incomes of less than $300 a month, and therefore Government had decided that any funds available for housing should be devoted firstly to the resettlement of squatters, and secondly to its own low-cost housing programme.
52. Attention has therefore been concentrated on making the best use of what money is available, both that remaining in the revolving fund, and that accruing from the capital element in rental income.
53. The position was closely examined, and a capital expenditure budget for 1961-66 was drawn up, from which it appeared that five further projects, each costing about $5 millions, could be undertaken within that period, and met from existing resources. Government had no objection to this course, and on the strength of this decision planning
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