68 | The Economy
Corporation and the MTR Corporation Limited, and capital investments in the Hong Kong Housing Authority and the Urban Renewal Authority. Its income is derived mainly from appropriation from the General Revenue Account and dividends.
The Civil Service Pension Reserve Fund acts as a reserve to meet payment of civil service pensions in the unlikely event that the Government cannot meet such liabilities from the General Revenue Account. Its income is derived from appropriation from the General Revenue Account and investment income.
The Disaster Relief Fund finances grants for humanitarian aid in relief of disasters that occur outside Hong Kong. Its income is derived mainly from appropriation from the General Revenue Account.
The Innovation and Technology Fund finances projects that contribute to innovation and technology upgrading in the manufacturing and service industries, as well as those that contribute to the upgrading and development of the manufacturing and service industries. Its income is derived mainly from investment income.
The Land Fund was established on July 1, 1997 to enable the investments held by the former Trustees of the HKSAR Government Land Fund to be formally brought into the Government's account. Its income is derived from investment income.
The Loan Fund finances loan schemes such as housing loans and student loans. Its income is derived mainly from loan repayments and interest.
The Lotteries Fund finances welfare services through grants and loans. Its income is derived mainly from sharing the proceeds of the popular Mark Six lotteries.
Management of Public Finances
The principles underlying the Government's management of public finances are set out in the Basic Law: to keep expenditure within the limits of revenues in drawing up the budget, to strive to achieve a fiscal balance, to avoid deficits and to keep the budget commensurate with the growth rate of its gross domestic product. The Budget presented by the Financial Secretary to the legislature each year is developed against the background of a medium-range forecast to ensure that full regard is given. to the longer-term trends in the economy.
Public Expenditure
In accounting terms, public expenditure is taken to include government expenditure from the General Revenue Account and the other funds except loans and investment from the Capital Investment Fund, plus expenditure by the Housing Authority and government trading funds. Government grants and subventions to institutions in the private or quasi-private sectors are included, but not spending by organisations in which the Government has only an equity stake (such as the MTR Corporation Limited, the Kowloon-Canton Railway Corporation and the Airport Authority). Similarly, loans and equity injections by the Capital Investment Fund are excluded as they do not reflect the actual consumption of resources by the Government.
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