The Economy | 61
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 to help victims 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 the upgrading of technology in the manufacturing and service industries, and those that contribute to the upgrading and development of the manufacturing and service industries in general. 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 Lottery.
Management of Public Finances
The principles underlying the Government's management of public finance 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
Public expenditure is taken to include government expenditure from the General Revenue Account and the Government's statutory funds excluding Capital Investment Fund, plus expenditure by the government trading funds and the Housing Authority. 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, advances and equity investments by the Capital Investment Fund as well as repayment of government bonds and notes are excluded as they do not reflect the actual consumption of resources by the Government.
The Housing Authority, operating through the Housing Department, is financially autonomous. The Government provides the Housing Authority with capital and land on concessionary terms to finance the provision of public housing rental flats to those in need.
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