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THE ECONOMY
The statutory funds included in the public sector comprise the Home Ownership Fund, the Development Loan Fund, the Lotteries Fund, the Mass Transit Fund, the Student Loan Fund and the Capital Works Reserve Fund.
The Home Ownership Fund finances mainly the construction of flats for sale under the Home Ownership Scheme. The Housing Authority is the government's agent for the design, construction and marketing of these flats. The fund was initially established by a transfer from the General Revenue Account and derives its income from the proceeds of sales of the flats. The fund also finances the recurrent expenditure on the administration and planning of the Private Sector Participation Scheme.
The Development Loan Fund is used mainly to finance social and economic develop- ments including, in particular, loans to the Housing Authority for the construction of public housing estates. Transfers are made from the General Revenue Account to the fund to meet the loan requirements of the Housing Authority. Otherwise the fund's income is derived from interest payments and capital repayments.
The Lotteries Fund is used to finance the development of social welfare services through loans and grants. It derives its income mainly from a share of the proceeds of the Mark Six Lotteries.
The Mass Transit Fund is used to finance the purchase of government equity in the Mass Transit Railway Corporation. Its income is derived entirely from transfers from the General Revenue Account.
The Student Loan Fund is used to finance loans to students of the two universities, the two polytechnics, Baptist College and other approved post-secondary institutions, and to Hong Kong students studying in the United Kingdom. Transfers are made as necessary from the General Revenue Account to the fund to enable the fund to meet its commitments, the only other source of funds being loan repayments.
The Capital Works Reserve Fund finances the Public Works Programme and land acquisitions. Its income is derived entirely from transfers from the General Revenue Account, and the amount of such transfer each year is determined in the light of available resources, particularly from the proceeds of land sales.
Revenue Sources
There is no general tariff on goods entering Hong Kong but duties are charged on four groups of commodities - alcoholic liquors, tobacco, certain hydrocarbon oils and methyl alcohol irrespective of whether they are imported or manufactured locally. All firms engaged in the import, export, manufacture, storage or sale of dutiable commodities must be licensed.
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In February 1984, a 20 per cent ad valorem duty was introduced on European-type liquor, except beer, cider and perry, and the relevant specific duty rates were reduced by 10 per cent. The specific duty rates on alcohol now range from $0.66 a litre on Hong Kong brewed beer to $60 per litre on brandy. On tobacco, the rates range from $33 a kilogram on Chinese prepared tobacco to $178 a kilogram on cigarettes. On motor and aircraft spirits the duty is $2 a litre and on diesel oil for road vehicles $1 a litre. On methyl alcohol the duty is $3.24 a litre.
Rates are levied on the occupation of landed property at a percentage of the assessed rateable value which is, briefly, the annual rent at which the property might reasonably be expected to be let. New valuation lists are prepared periodically as directed by the Governor, enabling rateable values to be reviewed and updated in line with market rental levels. The current lists came into effect on April 1, 1984, with all rateable values determined