43. Moreover, the introduction of new measures such as fixed-price lump sum contracts and cash limited provision should greatly assist us in controlling costs. Within a month or two, we should be in a position to put to Finance Committee further details of the estimated cost of the entire Airport Core Programme, and of how we propose to finance individual projects.
EXPENDITURE AND REVENUE ESTIMATES
44.
Improved economic progress in 1991 and the good growth prospects for this year are matched by the encouraging state of our public finances. We enter the new financial year with the capacity to expand government spending in real terms, prudently but significantly. At the same time, we will be able to maintain adequate reserves.
The 1991-92 Outturn
45.
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The latest estimate is that for 1991-92, we will record an overall budget surplus of $14.1 billion, excluding borrowings, compared with the original forecast of $1.3 billion. This surplus is welcome, and has been taken into account in assessing the extent to which we need further revenue measures.
46.
Of the surplus, $8 billion was the result of underspending. We budgetted originally for a total expenditure of $104.8 billion, including equity investments. In the event, total spending came to only $96.8 billion, some 8% lower.
47. The main reason for this shortfall in expenditure was an underspending of $5.6 billion on public works. One factor was the inevitable slippage of some projects in the Airport Core Programme as a result of delays in concluding the negotiations on the Memorandum of Understanding last year, leading to a deferral of spending to subsequent years. In addition, we achieved some helpful savings on public works contracts, thanks to lower construction prices.
48.
Buoyant revenues accounted for $4.7 billion of the surplus. We budgetted originally for total revenues of $106.1 billion. In the event, total revenue amounted to $110.8 billion, or about 4% more than expected.
49. The revenue from stamp duty and land sales provided the bulk of the additional revenue. Prices at land auctions were substantially above the original forecasts. We also benefited from the sale of two major sites postponed from the previous year.
50. Last year, we began sales of government bonds, which have raised $1.2 billion for the Capital Works Reserve Fund. Thus the total cash surplus is $15.3 billion, bringing our fiscal reserves at the end of 1991-92 to some $92 billion. This would cover some 76% of our total expenditure for next year. This represents a reasonable cushion against whatever shocks might be in store for us, although the proportion is not the highest in recent years.
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