ENG-1977 — Page 59

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FINANCIAL STRUCTURE

Assets, Liabilities and Funds At March 31, 1977, net available public financial assets were $3,713 million, while the public debt was equivalent to some $396 million - about $88 per head of population. Indebtedness decreased some $7 million during 1976-7, principally due to the repay- ment of borrowings under the Asian Development Bank loan towards the construction of a seawater desalting works near Castle Peak in the New Territories, which is repayable over 10 years from January, 1976, and under the loan from Lloyds Bank International Limited, which is repayable by five equal annual tranches beginning in August, 1976. The issue of $250 million of government bonds made in 1975-6, on which interest at the rate of 64 per cent is payable half-yearly in May and November, is repayable at par in November, 1980. The 34 per cent Rehabilitation Loan, of which $50 million was raised in 1947-8 to cover part of the cost of post-war reconstruction, is repayable not later than January, 1978. Its sinking fund stood at $35.7 million on March 31, 1977.

In addition to these assets and liabilities, there is a Development Loan Fund and a Lotteries Fund, which exist for special purposes. The Development Loan Fund, financed mainly by transfers from general revenue, interest payments and capital repayments, totalled $1,056.9 million at March 31, 1977. It is used to finance social and economic developments of a self-liquidating nature. The greater part has been used for low-cost housing schemes, but during the year 9,406 students at universities, the polytechnic and a post-secondary college received interest-free loans totalling $27.9 million. At March 31, 1977, liquid assets totalled $239.2 million and outstanding commitments $334.9 million.

The Lotteries Fund, established in 1965, is mainly for financing by grants and loans the development of social welfare services. The fund started with a transfer from general revenue of $7.4 million and an additional $82.6 million was credited between 1965 and 1977 through the net proceeds of government lotteries, the Royal Hong Kong Jockey Club lotteries and the auction of special vehicle registration numbers. At March 31, 1977, grants and loans amounting to $67.9 million had been approved. A further sum of $1.1 million in unclaimed prizemoney was held on deposit.

Audit of Public Accounts

The audit of all government accounts and those of more than 80 statutory and non- statutory funds and public bodies, as well as a review of the accounts of the multi- farious subvented organisations operating in Hong Kong, is carried out by the Director of Audit. His appointment, tenure of office, duties and powers are prescribed in the Audit Ordinance. To ensure the director's complete independence in the exercise of his functions, the ordinance provides that he shall not be subject to the direction or control of any other person or authority, and also prescribes certain safeguards against his dismissal or premature retirement.

The annual report and certificate of the Director of Audit on the accounts of the Hong Kong Government, which he submits to the Governor, is presented to the legislature and transmitted to the Secretary of State.

Duties

There is no general tariff on goods entering Hong Kong, but duties are charged on