ENG-1968 — Page 63

FINANCIAL STRUCTURE

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higher salaries and corporation profits tax receipts which reflected the prosperity of the Colony during last year. There were short- falls on three recurrent heads (duties, fees of court and Kowloon- Canton Railway) but all other recurrent heads produced excesses. Again, as in the previous year, the biggest shortfall was in capital receipts from land sales which were below the estimate by some $33 million. Expenditure for the financial year 1967-8 was $1,766 million against the estimate of $1,923 million showing a shortfall of $157 million. Of the $446 million voted for civil engineering, water and building projects under public works non-recurrent heads of expenditure only $348 million was actually spent.

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At March 31, 1968, net available public assets were $926 million, of which $138 million was earmarked in a Revenue Equalization Fund as a reserve against possible future deficits on current account. According to normal government practice, the statement of assets and liabilities excludes the public debt of the Colony from the liabil- ities. The debt at March 31, 1968 was $69.9 million or the equivalent of approximately $18 per head of population. Indebtedness decreased by $5.5 million during the year, owing mainly to the repayment of £200,000 of the United Kingdom's interest-free loan of £3 million for the development of Kai Tak Airport. This loan is repayable in 15 annual instalments; the first repayment was made on October 1, 1961. The Rehabilitation Loan, which was raised in 1947-8 to cover part of the cost of post-war reconstruction, is repayable in 1973-8; there is provision for a sinking fund which stood at $26.7 million on March 31, 1968.

In addition to the Assets and Liabilities referred to, there exists for special purposes the Development Loan Fund and a Lotteries Fund (see Appendix XIII). The Development Loan Fund, of $602 million, is used to finance social and economic development projects of a self-liquidating nature. The greater part has been used for low-cost housing schemes. At March 31, 1968 outstanding commit- ments from funds allocated exceeded liquid assets of $8 million by $156 million. The Lotteries Fund, established in 1965, is for the support and development of social welfare services in the Colony. The fund started with a transfer from general revenue of $7.4 million and an additional $8.7 million was credited during the period June 30, 1965 to March 31, 1968, by which date grants and loans