TNAG-0761-FCO40-965-Budget-of-Hong-Kong--1978-1979-1978 — Page 90

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5

Fiscal Reserves

5. Our fiscal reserves at 1st April 1978 should

stand at:

General Revenue

$M

Balance at 31st March 1977

3,713

Add:

present estimate

of surplus in 1977-78

960

4,673

After allowing $3,000 million as cover for our

contingent liabilities (which will rise to at least

$9,000 million by 31st March 1982, the last year of the

new forecast period, thanks to the Tsuen Wan Extension of

the MTR and the Home Ownership Scheme, we shall have

free reserves of $1,673 million to finance our

seasonal deficits on General Account and any short term

difficulties.

Expenditure next year will be of the

order of $10, 250 million (c f as a matter of interest,

8440

expenditure in your first full year here as Governor,

2110

namely, 1972-73, or $3,800 million). Thus our position

will be a little better than the guideline which "requires"

us to maintain free reserves at the beginning of a

financial year equivalent to 15% of estimated expenditure

in the ensuing year; but this is comforting as I am

already rather fearful about the rate at which recurrent

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/ expenditure

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