TNAG-2471-FCO40-3595-Confidential-talks-between-the-UK-and-China-regarding-financ-1992 — Page 170

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Miss S Brooks

Legal Counsellor

DATE:

14 January 1992

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INSTRUCTIONS TO THE GOVERNOR ON FINANCIAL MATTERS

1.

I refer to your minute of 13' January asking me whether it is possible for HMG to direct the Governor to hand over Hong Kong Government public funds without the necessity of having to obtain the Legislative Council's prior agreement. I think the answer must be 'no'.

2.

The requirement for the Legislative Council to vote on Bills including those on public expenditure does not from the Letters Patent but from the Public Finance Ordinance 1983. (It may be that there is a new Ordinance which has replaced this Ordinance or an amending Ordinance, but if so, I do not have them). The Public Finance Ordinance which defines what is meant by 'the general revenue', provides that no expenditure shall be charged on the general revenue except as provided by or as under the Ordinance or any other enactment (section 4). It also provides for the Financial Secretary to cause to be prepared each financial year estimates of the revenue and expenditure of the Government for the next following financial year, and cause such estimates to be laid before the Legislative Council (section 5(1)). Section 6(1) of the Ordinance provides that the heads contained in the estimates of expenditure in a financial year shall be included in an Appropriation Bill which shall be introduced into the Legislative Council at the same time as the estimates. Upon the enactment of the Appropriation Ordinance the estimates of expenditure for that financial year shall be deemed to be approved to the extent they are provided for in the Ordinance (section 6(2)). The Legislative Council also may, in advance of an Appropriation Ordinance, by resolution authorise expenditure for the services of the Government in respect of a financial year to be charged on the general revenue (section 7(1)). Finally, if at the close of account for any financial year it is found that expenditure charges to any head is in excess of the sum appropriated for that head by an Appropriation Ordinance, the excess shall be included in a Supplementary Appropriation Bill to be introduced into the Legislative Council (section 9).

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