XN000022-1988-01-13 — Page 9

WEDNESDAY, JANUARY 13, 1988

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MOTION FOR TRANSFER OF FUNDS PASSED

THE

A MOTION TO AMEND THE RESOLUTION FOR THE SETTING UP OF CAPITAL WORKS RESERVE FUND WAS PASSED IN THE LEGISLATIVE COUNCIL MEETING TODAY (WEDNESDAY).

MOVING THE MOTION ON THE PUBLIC FINANCE ORDINANCE, THE FINANCIAL SECRETARY, THE HON PIERS JACOBS, PROPOSED THAT FROM THE BEGINNING OF THE NEXT FINANCIAL YEAR CERTAIN MAJOR CAPITAL ACCOUNT ITEMS CURRENTLY BEING FUNDED FROM THE GENERAL REVENUE ACCOUNT BF TRANSFERRED TO THE CAPITAL WORKS RESERVE FUND ACCOUNT.

AN

OVER THE NEXT FEW YEARS, THE ADMINISTRATION WOULD IMPLEMENT IMPROVED SYSTEM OF INTERNAL FINANCIAL MANAGEMENT TO FACILITATE THE ONGOING PROCESS OF DETERMINING PRIORITIES IN RECURRENT AND CAPITAL EXPENDITURE WITHIN OVERALL FINANCIAL CONSTRAINTS, HE SAID,

"AN ESSENTIAL FEATURE OF THIS SYSTEM IS THE BLOCK ALLOCATION OF FINANCIAL RESOURCES TO INDIVIDUAL POLICY AREAS SO THAT RELATIVE PRIORITIES MAY BE DETERMINED WITHIN EACH SECTOR, HE SAID.

"

IT IS NECESSARY

"TO FACILITATE IMPLEMENTATION OF THE SYSTEM, THAT A CLEAR DISTINCTION BE MADE BETWEEN RECURRENT EXPENDITURE CAPITAL EXPENDITURE, HE ADDED.

"

AND

ON THE FINANCIAL IMPLICATIONS OF THE PROPOSED TRANSFER OF CERTAIN ITEMS FROM THE GENERAL REVENUE ACCOUNT TO THE CAPITAL WORKS RESERVE FUND ACCOUNT, MR JACOBS DESCRIBED THEM AS 'NEUTRAL”.

WHILE THE CHANGE WOULD INCREASE ANNUAL EXPENDITURE UNDER THE CAPITAL WORKS RESERVE FUND BY ABOUT 10 PER CENT, THIS WOULD BE OFFSET BY A CORRESPONDING REDUCTION IN THE GENERAL REVENUE ACCOUNT

EXPENDITURE, HE SAID.

PLANS TO IMPROVE FUTURES GUARANTEE ARRANGEMENTS

PLANS WERE BEING DRAWN UP TO IMPROVE THE EXISTING GUARANTEE ARRANGEMENTS OF THE HONG KONG FUTURES GUARANTEE CORPORATION, THE FINANCIAL SECRETARY, THE HON PIERS JACOBS. TOLD THE LEGISLATIVE COUNCIL TODAY (WEDNESDAY).

MR JACOBS WAS REPLYING TO A QUESTION BY THE HON WONG PO-YAN, WHO HAD ASKED WHETHER THE PAID-UP CAPITAL OF THE CORPORATION WOULD BE INCREASED AFTER IT FAILED TO HONOUR ITS OBLIGATIONS DURING LAST OCTOBER'S CRISIS IN THE FUTURES MARKET.

/HE SAID