The Legislative Council of the Hong Kong Special Administration Region is vested with the powers to examine and approve budgets introduced by the government under Article 73 of the Basic Law.
The arrangements for the submission of the annual estimates of revenue and expenditure of the government to the Legislative Council for its approval are set out in the Public Finance Ordinance, Cap 2, which provides for the control and management of the public finances of Hong Kong. The Financial Secretary may propose changes to the approved Estimates of Expenditure to the Finance Committee for approval.
Estimates of Expenditure
Each year, the Financial Secretary lays before the Legislative Council the government's estimates of revenue and expenditure. He delivers the annual budget speech at a meeting of the Legislative Council, outlining the government's budgetary proposals and moving the second reading of the Appropriation Bill, which gives legal effect to the annual expenditure proposals contained in the budget.
After the motion for the second reading of the Appropriation Bill has been proposed in the Council, the debate thereon shall be adjourned. The expenditure proposals in the budget, consolidated in the Draft Estimates of Expenditure, may be referred by the President to the Finance Committee for detailed examination before consideration of the Appropriation Bill in the Council.
The Finance Committee holds special meetings to examine the Draft Estimates of Expenditure to ensure that the provision sought is no more than is necessary for the execution of approved policies. These special meetings are normally held in public and conducted in accordance with Rules 49 to 53 of the Finance Committee Procedure. After the special meetings, the Chairman of the Finance Committee shall present a report to the Council.
Upon the resumption of the debate on the second reading of the Appropriation Bill, Members may speak on the financial and economic state of Hong Kong and the general principles of government policy and administration as indicated by the Appropriation Bill and the Draft Estimates. To enable all Members to have the chance to speak on the Bill, the Council holds its meeting on two consecutive days. The government responds to Members' speeches at the following meeting, during which Members will vote on the second reading of the Bill. Amendments to the Bill, if any, should comply with Rule 69 of the Rules of Procedure and are dealt with in committee of the whole Council after the second reading of the Bill. The Bill is passed when it receives the third reading.
After delivering his budget speech, the Financial Secretary puts his revenue proposals in legislative form for consideration by the Legislative Council. Revenue proposals may be brought into effect by the enactment of bills or the making of subsidiary legislation. In April 1999, the Financial Secretary introduced the Revenue Bill 1999 which contains all the revenue proposals in that year's budget. The Bill with amendments was passed by the Council on 8 July 1999.
Pending the coming into force of the relevant legislation, Public Revenue Protection Orders are made by the Chief Executive under the Public Revenue Protection Ordinance, Cap 120 to enable revenue proposals to have immediate effect.
Other Financial Proposals
During a financial year, the Financial Secretary may propose to the Finance Committee changes to the approved Estimates of Expenditure. These proposals are considered at the regular meetings of the Finance Committee or, if they are related to public works or establishment matters, considered initially by the relevant subcommittees of the Finance Committee before submission to the Finance Committee for its approval.
Closing of Account
Expenditure arising from any changes to the approved Estimates of Expenditure is charged to the relevant expenditure head. At the close of account for any financial year, if it is found that the expenditure charged to any head is in excess of the sum appropriated for that head by the Appropriation Ordinance for that year, the excess shall be included in a Supplementary Appropriation Bill which shall be introduced to the Legislative Council as soon as practicable after the close of the financial year.