CONFIDENTIAL
Revised Estimates 1976/77
5. The estimates show revised revenues of HK$7,400 million and expenditure of HK$6,843 million, giving an estimated surplus of HK$557 million as against a forecast deficit of HK$355 million. The difference is explained mainly by significant under-spending on the public works programme: the Public Works Department in its capital programme was competing with the Mass Transit Railway Authority and other parts of the private sector for limited resources. Some of the under-spending in 1976-77 was offset by increased expenditure in education and other sectors.
Revenue and Expenditure 1977/78
Revenue
6. The new Budget for 1977/78 provides for revenue of HK$8,412 million. This reflects the current buoyant state of the Hong Kong economy Estimated current revenue will increase by HK$763 million (11.4%) to HK$7,474 million. The increase in revenue derives
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essentially from increases in the anticipatory yields from earnings and profit and from the increased yield from rates arising from increases in rateable values. There are some concessions in personal tax allowances and also some stamp duty concessions on lower value properties. These introduce an element of "progressivity" but this is partly off-set by the increases.in rates.
Expenditure
7. Total expenditure is estimated to be HK$8,245 million, an increase of 20% on 1976/77. Recurrent expenditure is estimated to increase by HK$835 million to HK$6,236 million, an increase of 15%. Most of this expenditure will be concerned with "maintaining present services, expanding them to meet increased demand at existing standards and extending and improving them within approved policies in accordance with the timings shown in the Planning Paper". HK$ 196 million is for new services including public assistance for the unemployed and the silicosis compensation scheme, both matters to which we have attached importance. The public asistance scheme for the unemployed is now in operation but agreement has still to be reached with insurance companies on the compensation scheme for silicosis victims. Estimated capital expenditure will increase by HK$567 million to HK$2,009 million (an increase of 39%), of which HK$1,434 million will be for public works programmes including new towns and housing.
8.
The breakdown of expenditure of the key areas covered in the Planning Paper is as follows:
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CONFIDENTIAL