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Financial Structure
ALTHOUGH the approval of the Secretary of State for the Colonies is still required before decisions are made on certain major matters including currency and banking, the Colony in other respects has complete autonomy in financial affairs and the ultimate financial authority is the Legislative Council.
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Hong Kong is financially self-supporting, apart from the cost of its external defence to which it makes a substantial contribution. From 1958 to 1964 the sum was £1 million a year, but in 1964 an additional £6 million was made available over the years to 1970 as a contribution towards the cost of Army and Air Force building programmes. A new four-year Defence Costs Arrangement became effective in 1967-8 which superseded the previous measures. Under this arrangement, the contribution to recurrent defence expenditure has been increased to £3,925,000 a year, with a sum of £2,400,000 made available during the four-year period of the arrangement, for a services' capital works programme. At the same time, the main- tenance function of HBM Ministry of Public Buildings and Works in Hong Kong in respect of certain service property and the expendi- ture involved, has been taken over by the Public Works Department of the Hong Kong Government.
Apart from the Housing Authority, which has a certain measure of autonomy, there are no financially independent subordinate bodies similar to the local government authorities in the United Kingdom and other Commonwealth territories. The revenue and expenditure figures therefore represent all the public income and all the public expenditure of the Colony other than 'below the line' operations of various official funds.
A small deficit was returned in the first financial year after the war. Since then, with the exception of 1959-60 and 1965-6, when there were deficits of some $45 million and $137 million respectively, a series of surpluses, some of them substantial, have been accumu- lated. Figures for the past four years are shown in Appendix IX.
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