Budget and financial proposals
The Legislative Council of the Hong Kong Special Administrative 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.
The Budget
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 is adjourned. The expenditure proposals in the Budget, consolidated in the 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 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 Paragraphs 49 to 53 of the Finance Committee Procedure. After the special meetings, the Chairman of the Finance Committee presents 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 policies and administration as indicated by the Appropriation Bill and the 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 the committee of the whole Council after the Second Reading of the Bill. The Bill is passed when it receives the Third Reading.
Revenue proposals
The revenue proposals made by the Financial Secretary in his budget speech are introduced in the form of bills or subsidiary legislation for consideration by the Legislative Council. To protect public revenue, the Chief Executive has the power under the Public Revenue Protection Ordinance (Cap. 120) to make public revenue protection orders to give immediate effect to such bills or subsidiary legislation.
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.