TNAG-0289-FCO40-325-Departmental-briefs-on-Hong-Kong-1971 — Page 122

SECRET.

Revenue and Expenditure

Sterling Assets

grants towards higher education projects (the two universities

and technical education) and a loan and grants for the

development of Kai Tak airport.

In addition, we have provided

£400,000 for the purchase of equipment for 4 new technical

institutes. It is a sore point in Hong Kong that since 1945

we have not felt able to make regular aid allocations to the

Colony. Our reason is that they are able to manage without;

if they run short of development finance, our general

attitude has been that they should raise local loans (the

public debt is very low) or increase taxation. But since we

provide no aid, we cannot exercise control over their financial

policies; the ultimate responsibility of the Secretary of

State is in practice purely formal, and they are to all intents

and purpose financially autonomous.

34. Annual revenue and expenditure have more than doubled

since 1963 to £214m. (est.) and c. £200m. (est.) respectively

in 1971/72. There was a budget deficit in 1959/60 (£2.8m) and

in 1965/66 (£8.6m) but in all other years since 1947 surpluses

have been realised.

year 1969/70.

There was a surplus of £30 million in the

35. Hong Kong is the largest single holder of sterling assets. “

These assets stood at about £535 million at the beginning of

1971.

SECRET

:

/SOCIAL SERVICES