The Economy | 59
of the Legislative Council for specific purposes: the Capital Works Reserve Fund, Capital Investment Fund, Civil Service Pension Reserve Fund, Disaster Relief Fund, Innovation and Technology Fund, Land Fund, Loan Fund and Lotteries Fund.
The Capital Works Reserve Fund finances the public works programme, land acquisitions, capital subventions, major systems and equipment, computerisation and the payment of redemption money in respect of land exchange entitlements. Its income is derived mainly from land premiums and investment income.
The Capital Investment Fund finances the Government's capital investments, such as equity injections to the Airport Authority and the MTR Corporation Limited, and capital investments in the 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 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 help promote innovation and technology upgrading in 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 education 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 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 the Capital
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