FINANCE AND ECONOMY
Urban Council
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The Urban Council, operating through the Urban Services Department, is free to draw up its own budget and to determine its own priorities in expenditure within its various spheres of activity. This expenditure is financed mainly through the Urban Council rate; and from fees and charges for the services and facilities which the council provides. In the 1979–80 financial year, the council worked to an overall budget of $680 million.
Housing Authority
The Housing Authority is also financially autonomous. The authority is responsible for the provision and management of public housing and its executive arm is the Housing Depart- ment. Under the Housing Ordinance, the authority is required to ensure that its income, derived mainly from rent, is sufficient to meet its recurrent expenditure on the management of public housing estates. In providing new housing estates under the government's public housing programme, the authority is provided with land, the value of which is reflected in the authority's balance sheet as a government contribution. Where its cash flow is inadequate to meet construction costs, the authority within limits may borrow from the Development Loan Fund. In the 1977-8 financial year, loans amounting to $300 million, made to the authority for this purpose in earlier years, were converted into a government contribution towards the provision of public housing in Hong Kong.
The Housing Authority is also responsible for squatter control, the clearance of squatters from Crown land required for development, and the development of temporary housing and temporary industrial areas. The cost of these activities is met in full from the govern- ment's general revenue. The authority is the agent of the government in designing, con- structing, marketing and managing the flats and commercial facilities under the Home Ownership Scheme; the flats are financed through the Home Ownership Fund, while the commercial facilities are financed from the Development Loan Fund.
Mass Transit Railway Corporation
The Mass Transit Railway Corporation, which was established in September, 1975, is a statutory body independent of the Hong Kong Government, but owned by it. It has an authorised share capital of $2,000 million. At December 31, 1979, 11,452 shares of $100,000 each had been issued to the government. Much of the capital expenditure of the corporation is financed through export credit facilities and from borrowings in local and international markets. Up to the end of 1979, the corporation had negotiated $9,472 million in medium- term and long-term loans, the bulk of which are backed by government guarantees.
Funds for Special Purposes
By resolution, the Legislative Council has created the Development Loan Fund, the Home Ownership Fund and the Lotteries Fund.
The Development Loan Fund, created in 1958 and financed mainly by transfers from the government's general revenue, interest payments and capital repayments, totalled $1,566.5 million at March 31, 1979. It is used to finance social and economic developments, with the greater part put to low-cost housing schemes. However, during the 1978-9 financial year, an amount of $42.8 million was allocated as interest-free loans to 11,000 students at the two universities, Hong Kong Polytechnic, and the Hong Kong Baptist College. The student financing scheme was extended to the Hong Kong Shue Yan College and Lingnan College in June, 1979. At March 31, 1979, liquid assets of the fund totalled $213.4 million and outstanding commitments amounted to $921.7 million.