TNAG-1073-FCO40-1323-Policy-of-the-Government-of-Hong-Kong-on-education-including-1981 — Page 292

The Hong Kong Education System

Chapter 5

The Financing of Education and Provision of School Places

A: General background

Hong Kong has almost complete autonomy in its domestic financial

affairs, with the ultimate authority for the government's revenue and

expenditure proposals resting with the Legislative Council.

The revenue

and expenditure estimates for each financial year, which starts on

1 April, are submitted to the Finance Branch of the Government Secretariat

by each government department in October of the previous year.

The

estimates are scrutinised and are adjusted according to the priorities set

for the government as a whole. They are then submitted to the Legislative

Council with the Appropriation Bill at the time of the Financial Secretary's

Budget Speech in February.

5.2

A small deficit in the government's accounts was returned in the

first financial year after World War II. Subsequently - with the exception

of 1959-60, 1965-6 and 1974-5 when there were deficits of some $45 million,

$137 million and $380 million respectively a series of surpluses, some of

them substantial, have been accumulated in the years up to and including

1980-1. On 1 April 1981, 'free' fiscal reserves stood at $10,300 million.

Such reserves are required to secure the government's contingent liabilities,

to enable seasonal deficits to be met, and to ensure that the government is

able to cope with short-lived tendencies for expenditure to exceed revenue

or for revenue yields to fall below expectations.

5.3

This accumulation of reserves has been achieved partially through

a strong growth in revenue. Revenue has expanded more than 54 times from

$309 million in 1951-2 to $16,796 million in 1979-80. The rate of increase

has been affected by variations in such factors as the economic situation

and inflows of capital, and by the introduction of an appropriations-in-aid