ENG-1968 — Page 23

PROGRESS

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which prevailed in the aftermath of Britain's devaluation had been largely removed and a new firmer basis of financial security had been obtained. The Colony still remained confident in the face of the renewed international monetary crisis and controversy over Deutsche marks and French francs in November. Britain's related fresh austerity measures and severer payment conditions for imports were regarded as no more than another of the difficulties regularly created in importing countries to irritate and disturb, but never to dishearten, Hong Kong's export traders and industrialists.

The budget debate in the Legislative Council in February gave a clear indication of the strength and stability of the Colony's internal finances. The financial year 1967-8 ended with yet another surplus; this time of $133 million, which is the second highest on record. Curiously enough the disturbances, which had raised pro- ductivity by reducing labour mobility and man-hours lost through industrial disputes to astoundingly low figures, also contributed to the formation of the surplus by causing delays in public works spending, though more competitive tendering was another factor.

The Financial Secretary in presenting his estimates for 1968–9 conservatively forecast continuing growth in the general revenue of about four per cent. Expenditure was expected to reach almost $2,000 million, a figure twice that of six years previously. As 1968 proceeded, both income and spending followed a pattern similar to that of 1967. It became clear from returns under the Earnings and Profits Tax, which is based on the previous year, that the level of business during that year was very much higher than had been thought, while revenue from current activities had been particularly buoyant. There was continuation of the trend of underspending in the Public Works Non-Recurrent sector.

Deposits in local banks increased steadily and in May overtook the previous record for any month. They reached a new record of over $10,000 million by the end of the year. Much of this was due to money flowing back to the Colony from overseas.

ECONOMIC GROWTH

Undoubtedly pride of place in this review of a year of surging progress goes to the Colony's export performance. In the previous year there had been an overall increase in exports of 17 per cent