TNAG-1203-FCO40-1505-Policy-on-visas-and-entry-certificates-in-Hong-Kong-1982 — Page 222

VOLUME 8

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(ANNEX 17)

a)

The Government will be required to frame its budget for the next year around the levels for expenditure, local revenue and the ceiling for budgetary aid agreed during the course of the annual review.

b) It is however open to Governments, should they so wish, to apply to the Secretary of State to incur further expenditure on items which may have been excluded from the budgetary survey as not essential. They will need to show how they propose to cover this expenditure with further additional revenue. In so doing they should bear in mind that the local revenue in the budgetary survey will already have been established at as high a level as possible within the considered capacity of the Government to achieve. Details of any such proposals should be set out in the saving despatch under cover of which the estimates are submitted to the Secretary of State. The Secretary of State retains the power to require such proposals to be withdrawn before approving the budgetary aid element in the estimates. The Secretary of State's existing power to require increases of expenditure on certain services in order to ensure the discharge of his responsibilities for the good Government of the territory is not affected.

c)

Levels of budgetary support agreed in principle by the second and third years of the triennium arc maxima (subject to the inflation factor) and are liable to downward adjustment in the course of subsequent annual budgetary reviews.

d)

Any budgetary deficit incurred in excess of that which the British Government has undertaken to meet will be the sole responsibility of the territory and will be a first charge on local revenue in the subsequent year but one when audited outturn figures are available. However the British Government undertakes to consider a case for additional financial assistance to meet any part of such a deficit which has resulted from unavoidable expenditure incurred as a result of natural disasters such as earthquakes and hurricanes.

e)

A territory may retain as a working balance that proportion of any budgetary surplus which is not more than 5% of the total of agreed revenue plus budgetary aid for the year in which the surplus is earned subject to specified cumulative ceilings. This working balance shall not be used for the creation of reserve funds but could be drawn upon for genuinely necessary and urgent expenditure subject to prior agreement with the British Government.

Submission of the Estimates

5.

(i)

Estimates drawn up in accordance with the expenditure and revenue framework agreed at the time of the annual review should be submitted to the Secretary of State in accordance with the provisions of Colonial Regulations. Three copies of the Estimates are required and should reach the FCO at least eight weeks before it is proposed to hold the Budget Session. They should be accompanied by statements of general revenue balances and assets and liabilities (details of the FCO preferred layout are given in Yaxley's letter HW 093/8 of 9 June to Financial Secretaries).

Details of the annual review framework figures in constant prices and the conversion to cash prices should be included in the covering saving despatch to the Estimates.

(ii) As indicated in para 4(ii)(b) of this enclosure any real term adjustments to the previously agreed framework should be explained with reasons in the covering saving despatch.

October 1978

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