$Million
25.000
Comparison of Capital Works Expenditure with Guideline (at 1991-92 price levels)
20,000-
18,990
15,000
10,000
14,900
20.410
16.310
21.840
21,930
Guideline
Actual
Guideline
Revised Estimates
Guideline Estimates
1990-91
1991-92
1992-93
Year
68.
However, the Medium Range Forecast made it clear that our revenue in future years would not be sufficient to meet expenditure. Even after the revenue measures I will be proposing shortly, cash deficits will emerge after 1992-93. However, the end result will be that we shall have the reserves we need in 1996-97.
69.
In addressing the need to have adequate reserves, I have been conscious that the earlier we take the measures required to augment our reserves, the greater the cumulative effect and the greater our capacity to cope with unforeseen adverse developments.
70. My package of revenue measures will generate net additional revenue of $1.1 billion, bringing the total estimated surplus for 1992-93 to $5.1 billion, excluding borrowings. Our forecasts indicate that after taking the additional revenue into account, the reserves will stand at $71.6 billion at the end of March 1997, including borrowings of $4.8 billion. This will allow us to meet our commitments under the Memorandum of Understanding while maintaining a reasonable cushion against the contingencies of the next five years. It will have the additional subsidiary advantage that this evidence of our continuing financial strength and prudence should do much to reassure potential lenders at a time when we shall be financing our infrastructural development.
71.
Moreover, Hong Kong's finances in 1997 will benefit from the Hong Kong Special Administrative Region Government Land Fund. This receives and manages the share of land sale revenue which is set aside for the future SAR government. This fund is not included in the accounts of the Hong Kong Government but will become part of the new administration's fiscal reserves in 1997. At the end of March 1991, the land revenue transferred to the fund totalled $20.3 billion. The forecast is that it will receive a further $7.4 billion for 1991-92 and $8 billion in 1992-93. If these forecasts are achieved, the fund will have received $35.7 billion by the end of March 1993, excluding interest earned.
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