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Financial Structure
HONG KONG'S position as an international financial centre was emphasised in 1976 when the government was host to the Commonwealth Finance Ministers' Meeting. It was the first time that an important international ministerial meeting had been held in Hong Kong.
In an opening address, the Governor referred to Hong Kong's 'unusual economic and social scene' and told the visitors of the territory's policy of balancing prosperity and economic growth with social progress. He said Hong Kong was best known for the emphasis it places on the free operation of market forces, particularly the absence of constraints on trade and payments, and he hoped that the Commonwealth would continue to pursue policies designed to further international trade.
The meeting, which was attended by ministers and officials from 34 Common- wealth countries, took place at the end of September. As is customary, it immediately preceded the annual International Monetary Fund/World Bank meetings, which on this occasion were held in Manila.
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How Hong Kong Works
With the ultimate authority resting with the Legislative Council, Hong Kong has almost complete autonomy in financial affairs and draws up its own estimates of revenue and expenditure. However, approval by the Secretary of State for Foreign and Commonwealth Affairs is required before decisions are made on certain major matters such as currency and banking.
Hong Kong is financially self supporting and the government's accounts showed a surplus of $487 million for the year 1975–6.
A substantial contribution is made by Hong Kong to the costs of the garrison which is stationed locally, and a new seven-year Defence Costs Agreement came into effect on April 1, 1976.
The Urban Council, operating through the Urban Services Department, is also free to draw up its own budget and to determine its own priorities of expenditure within its various spheres of activity. These are financed mainly from the yield from the Urban Council rate and partly from other sources of revenue related-largely through fees and charges-to the services and facilities the council provides.
The Housing Authority, which is responsible for the development and manage- ment of all public housing, is financed mainly from loans from the government's Development Loan Fund and income from rents. It is also allocated land at sub- stantially less than market value. Its executive arm is the Housing Department. The
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