TNAG-0306-FCO40-342-Equipment-for-technical-institutes-in-Hong-Kong-provision-of-1971 — Page 198

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period 1970/71 to 1974/75. This shows that actual revenue and expenditure, on Recurrent Account, for the year 1969/70 were HK$2,325.3 million (£159.9 m) and HK$1,660 million (£114.1 m). The corresponding estimates for 1970/71 are HK$2,523.9 million (£173.5 m) and HK$1.958.7 million (£134.7 m). It seems likely however that the balance available for transfer to capital account at the end of the current financial year will be more than the £38.8 million at present estimated. The Colony's reserves at 31 March 1970 were HK$1,726 million (£118.7 m). On the face of it, therefore, there seems something to be said for the argument put forward by Mr. Wood. But that is by no means the whole story.

7. may

(a)

(b)

(c)

(a)

(e)

(f)

I suggest that in his discussion with Mr Wood Mr Royle wish to make use of the following facts:-

As stated in the General Memorandum Note of the attached Forecast, over the five-year period 1965/66 to 1969/70 there was a net accumulated surplus of HK$627 million on recurrent and capital account taken together, without taking into consideration the operations of the Exchange Fund. contrast, the Forecast for the next 5 years is for a deficit of HK$486 million after taking into account transfers from the Exchange Fund totalling HK$600 million;

By

Again, as in the past, recurrent expenditure should be covered by current revenue by a reasonable margin, but the rate of expenditure of capital projects may have to be adjusted in the light of available resources by phasing and deferment of expenditure.

"Personal Emoluments" take up 47 per cent of the total of recurrent expenditure. Personal emoluments will go up from HK$941 million this year to HK$1313 million in 1974/75, I regardless of any possible future salary changes (the Salaries Commission just appointed will be reporting next summer and there is little doubt that in one way or another their recommendations will involve increased expenditure).

Recurrent expenditure on education will go up from HK$384 million in 1970/71 to HK$577 in 1974/75. The com- parable figures for medical and health are HK$246 and HK$378 millions.

Over the 5-year period 1970/71 to 1974/75 it is estimated that a total of HK$183.3 million will have to be spent on the development of Kai Tak Airport. This is of course of direct benefit to HMG through the overseas operations of BOAC.

Over the 5-year period 1970/71 to 1974/75 the expenditure on transport, roads and civil engineering, for which the Government will have to find funds, is estimated to total HK$1,035.5 million (£71.2 m). This does not include the so called "Mass Transit System" (the proposed underground railway) which is estimatedto cost something between £250 m and £300 m. Nor does it include the double tracking of the Kowloon/Canton railway (I am afraid I have no estimate of what this will cost).

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