ENG-1963 — Page 89

4

Public Finances

ALTHOUGH the approval of the Secretary of State for the Colonies is still required before decisions are made on certain major matters including currency and banking, the Colony in other respects has complete autonomy in financial affairs and the ultimate financial authority is the Legislative Council.

Hong Kong is financially self-supporting apart from the cost of its external defence (to which, however, a substantial contribution is made), and raises its revenue from local sources to meet the cost of all-local works and services. The Colony's Legislative Council is the sole taxing and spending authority. Apart from the Housing Authority, which has a certain measure of autonomy, there are no financially independent subordinate bodies similar to the local government authorities in the United Kingdom and other Commonwealth territories. The Colony's revenue and expenditure figures therefore represent all the public income and all the public expenditure of the Colony excluding 'below the line' operations covering various funds. Comparative figures for the past five years

are:

Financial Year (1st April to 31st March)

Revenue $ million

Expenditure $ million

Surplus $ million

1958-9

629.3

589.9

...

39.4

Deficit

1959-60 ...

664.6

709.9

45.3

Surplus

1960-1

859.2

845.3

13.9

1961-2

1,030.4

953.2

77.2

1962-3

1,253.1

1,113.3

139.8

There was a small deficit in the first financial year (1946-7) after the war, caused by the legacy of the world conflict, but in each of the next 12 years substantial surpluses were accumulated. Not until the financial year 1959-60 was a further deficit recorded and this has been followed by the further surpluses shown in the table above. The accumulation of these surpluses in the varying