ENG-1982 — Page 74

FINANCIAL SYSTEM AND ECONOMY

Other Revenue

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Other revenue arises from taxes for the registration of motor vehicles, fines, forfeitures and penalties, royalties and concessions, yields from properties, investments and land transactions, reimbursements and contributions, government utilities, and from fees and charges for the provision of a wide range of goods and services.

Audit of Public Accounts

The audit of all the government's accounts is carried out by the Director of Audit. He also audits the accounts of the Urban Council, the Housing Authority and more than 50 statutory and non-statutory funds and other public bodies, as well as reviewing the financial aspect of the operations of the multifarious government-subvented organisations working in Hong Kong. The director's appointment, tenure of office, duties and powers are prescribed in the Audit Ordinance, and the ordinance provides that he shall not be subject to the direction or control of any other person or authority.

The Director of Audit's report on the annual accounts of the government is submitted to the Governor as President of the Legislative Council. It is then referred to the Public Accounts Committee, comprising a chairman and six members, all of whom are unofficial members of the Legislative Council. In the operation of its authority, the committee may call any public officer or other person concerned to give information and explanations and to produce any documents and records which it may require.

The report by the Public Accounts Committee on the Director of Audit's report relating to the accounts of the government is tabled in the Legislative Council at the same time as the Director of Audit's report. Both reports are transmitted to the Secretary of State.

Hong Kong as a Financial Centre

Hong Kong ranks as one of the world's leading international financial centres. Banks and other deposit-taking companies; insurance companies, pension funds, unit trusts and similar operations; foreign exchange and money brokers, stock and commodity brokers these and other financial organisations combine to present a wide range of financial services to both local and international customers. While the overseas links are particularly strong within Southeast Asia, Hong Kong's position as a bridge in the time difference between Japan and Europe has given the territory a vital role to play in world finance.

But the emergence of Hong Kong as a financial centre has not simply been a matter of geography. The government has continually worked towards developing a favourable environment, with sufficient regulation to ensure, so far as possible, sound business standards and confidence in the institutions but without unnecessary impediments of a bureaucratic or fiscal nature.

In contrast to the international dimension, small local operations such as credit unions, pawnbrokers and moneylenders, all of which are subject to some basic statutory regulation, continue to help meet the needs of Hong Kong people.

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Unlike other financial centres, Hong Kong has no central bank. Those functions which might typically be performed by one - such as supervising financial institutions, managing official foreign exchange reserves, or providing banking services to the government carried out by the relevant government offices, in conjunction with the government's commercial bankers where appropriate. Since the government has not needed to issue any conventional government debt in recent years because of habitual budget surpluses, and since there are no controls on foreign exchange dealing in Hong Kong, the range of central bank functions that have to be undertaken is narrower than in many other economies