TNAG-0621-FCO40-769-Budget-of-Hong-Kong-1977 — Page 25

why the

(D) THE EXEMPTION LIMIT FOR ESTATE DUTY WILL BE RAISED FROM DOLLARS 330 880 TO DOLLARS 400 000 THE LIMIT ON FUNERAL EXPENSESS

WILL BE INCREASED FROM DOLLARS 5,000 TO DOLLARS 10,000 AND THE 2 1/2% CEILING WILL BE REMOVED. COST TO REVENUE IS ESTIMATED AT DOLLARS 2 MILLION IN 1977-78.

THUS THE ACTUAL SURPLUS BUDGETTED FOR IS 43 MILLION DOLLARS (STILL EFFECTIVELY A BALANCE).

17. THE RATIO OF TOTAL PUBLIC EXPENDITURE (1.E. INCLUDING HOUSING

AUTHORITY, URBAN COUNCIL, DEVELOPMENT LOAN FUND AND LOTTERIES FUND) TO THE G.D.P. THIS YEAR IS ESTIMATED AT 16.4%. THE RATIO WILL RISE TO 17.6% IN 1977-78. THIS 7.3 INCREASE IN THE RELATIVE SIZE OF THE PUBLIC SECTOR IS CONSISTENT WITH THE SLOWER GROWTH RATE FORECAST FOR THE ECONOMY IN 1977 COMPARED WITH 1976 AND OUR POLICY OF LIFTIN

PUBLIC EXPENDITURE TO A RATHER HIGHER PLATEAU.

18, THE IMPACT OF THE BUDGET IS EXPECTED TO BE NEUTRAL IN MONETARY

TERMS EVEN AFTER ALLOWING FOR A SMALL DEFICIT OF DOLLARS 171 MILLION

IN THE ACCOUNTS OF THE PUBLIC SECTOR AS A WHOLE.

MACLEHOSE

FILES

HKD

PS/LORD GORONWY ROBERTS MR MURRAY

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