XN000022-1972-03-01 — Page 37

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Wednesday, March 1, 1972

STRONG RESERVE INSURANCE AGAINST REVENUE FALL-OFF

To Ensure Recurrent Services And Capital Expenditure Be Maintained

Government's primary aim must be to maintain day to day services such

as the Police Force, hospitals, and schools should the Colony's trade and

growth of revenue fall off.

The Financial Secretary, Mr. C.P. Haddon-Cave explained today that

this is one of the main reasons for keeping a strong reserve position.

Mr. Haddon-Cave also emphasised that Hong Kong is free to invest

its reserves either in Hong Kong or in London and also has complete freedom

to apend them should the need arise.

Earnings of $207 million from these investments this year financed no

fewer than 34 of the 65 heads of expenditure.

The Financial Secretary when he presented his Budget proposals in the Legislative Council today said that Hong Kong enters 1972/73 in "a strong position"

with a total reserve of $3,923 million.

He explained that an estimated $110 million for the appreciation of

investmente and a further 3913 million for the free surplus in the change

Fund added to the $2,900 million in the General Revenue Account should bring

the Colony's total reserve position at April 1 this year to $3,923 million. For this Hong Kong had to give thanks to the gilt edged market and careful management of the Colony's portfolio by the Crown Agents in London and the Accountant General acting within the broad guidelines laid down by the Exchange Fund Advisory Committee, one of the many advisory committees working quietly behind the scenes to provide the Administration with expert advice,h

pointed out.'

This