Section 6
Finance & Taxation
BARCLAYS
BANK
NATIONAL CITY
FIRST
NEW YORK
B
BANK
CHUNG
KHIAW
BANK
LIMITED
HONG KONG BRANCH,
THE BANK OF EAST ASIA LTD. DENTRAL DISTRIOT BRANCH
HANG
LUNG
BANK
Public Finance
With the ultimate authority resting with the Legislative Council, Hong Kong has almost complete autonomy in financial affairs. But approval by the Secretary of State for Foreign and Commonwealth Affairs of Her Majesty's Government in the United Kingdom is required before decisions are made on certain major matters such as currency and banking. The Financial Secretary is responsible for Hong Kong's financial and economic policy, and for the overall supervision of Government departments primarily involved in this field.
隆恒 ㄈㄊ乐乐
HONG
KONG
The Government's fiscal policy adheres to the principle of balanced budgeting, and since 1945 the public accounts have shown a surplus in most years, brought about by a strong and steadily expanding economy. This has enabled the Government to main- tain financial stability, while at the same time providing the infrastructural services essential to industrial devel- opment, housing, medical services, education, etc.
The Government has a general revenue balance of over HK$6 billion (US$1.2 billion). The public debt is about HK$630 million (US$126 million)—or about HK$130 (US$26) per head of population. Four loans totalling US$81.5 million have been concluded with the Asian Development Bank in recent years for major projects.
In the 1978-79 Fiscal Year over 45 per cent of public revenue was collected from internal revenue (earnings and profits tax, stamp duties, betting and sweepstakes tax, business registration fees, etc.), and 21 per cent of public revenue was derived from land sales and from properties and investments. Other revenue included rates, duties on tobacco, liquor and hydrocarbon oils; postal, airport, railway and water charges and court fees.
The major areas of public expenditure on social services in 1978-79 were education (18%), housing (12%), medical and health services (9%), and social welfare (4%).
Currency
The legal tender in Hong Kong is the Hong Kong dollar. It has been allowed to float since November 1974, and the exchange rate is about HK$5=US$1.
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In the absence of a central bank, Hong Kong's currency notes from $10 upwards are issued by two commercial banks:
*
*
The Hongkong and Shanghai Banking Corporation, and
The Chartered Bank.
The value of currency issued by the note-issuing banks is regulated by an Exchange Fund which receives payment from these banks in exchange for certificates of indebtedness denominated in Hong Kong dollars. These certificates are non-interest bearing, and are issued and redeemed at the discretion of the Financial Secretary. They provide the legal backing for the notes issued by the banks. The Exchange Fund's resources
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