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 | Monday, May 01, 2000, updated at 11:06(GMT+8) | ||||||||||||
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Hong Kong Reports a Surprise US$9.9 Billion SurplusHong Kong recorded a surprise surplus of US$9.9 billion in the 1999-2000 financial year, up from a revised deficit forecast of US$1.6 billion made by its Financial Secretary in March.The original forecast for the last fiscal year was a deficit of US$36.5 billion. Latest figures published by the Government Saturday show revenue at the end of March was US$3.6 billion better than expected. Officials attributed it to revenue from stamp duty on stock transactions, betting duty and the land premium obtained from lease modifications during the first quarter of this year. Expenditure, meanwhile, was US$7.9 billion lower than forecast. Of it, recurrent spending saved by US$2.9 billion through enhanced productivity programme. Other savings resulted from lower capital spending on acquisition of plants and equipments and loan schemes. Expenditure for the year ended March 31 amounted to US$223 billion and revenue to US$232.9 billion, resulting in a surplus of US$9.9 billion. Donald Tsang Yam-kuen has drastically lowered deficit from its original forecast of US$36.5 billion to US$1.6 billion. He forecast a deficit of US$6.2 billion for 2000-2001 in what should have been the third consecutive year before public finance returns to a healthy footing in 2001-02. Finance officials have warned of the need for a drastic tax reform in view of fears of chronic deficits. Non-affiliated legislator Eric Li Ka-cheung, accountants' representative, is adamant a fundamental review remains urgently needed. ``Don't just look at the net figures, but the main factors behind the revenue. It's highly unstable.'' He said the US$100 billion investments of government in shares in 1998 has brought about over US$80 billion in dividends, which will greatly improve the financial situation in the next two years. In addition to that, the floatation of MTRC will generate US$15 billion in revenue each in the next two years. ``These won't happen often. Taking these two elements out, you'll get US$30 billion less in revenue each year. The problem of deficits won't be solved even with the economic recovery,'' he said. Executive Council member Tam Yiu-chung described it as a ``big surprise.'' ``We hope the situation will continue to improve and the pressure on tax and fee hikes will be eased. ``The Financial Secretary has said he has no intention to frighten people. I think he just wants to be more cautious and careful. Government money is just taxpayers' money. He certainly worried if there's a structural deficit problem,'' said Mr Tam. Fiscal reserves stood at US$444.2 billion at March 31, an increase of US$9.9 billion compared with the balance of US$434.3 billion at March 31 last year.
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