THE ECONOMY
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Public expenditure has remained comfortably below 20 per cent of the gross domestic product for the last decade. The growth rate of public expenditure is compared with the rate of economic growth at Appendix 11.
Total government revenue in 1995-96 amounted to $180 billion. The consolidated cash deficit for the year was $3.1 billion. Details of revenue by source and of expenditure by component for 1995-96 and 1996-97 (Revised Estimate) are at Appendix 12.
1
The draft estimates of expenditure on the General Revenue Account are presented by the Financial Secretary to the Legislative Council when he delivers his annual Budget speech. In the Appropriation Bill introduced to the Legislative Council at the same time, the administration seeks appropriation of the total estimated expenditure on the General Revenue Account.
The estimates of expenditure contain details of the estimated recurrent and capital expenditure of all government departments, including estimates of payments to be made to subvented organisations and estimates of transfers to be made to the statutory funds.
The government's consolidated account recorded a deficit of $3.1 billion in 1995-96, after a continuous string of consolidated surpluses in the previous 11 years. The accumulated surpluses at the end of 1995-96 stood at $147.9 billion. These surpluses form the government's fiscal reserves and are available to meet any calls on its contingent liabilities and enable it to cope with any short-term fluctuations in expenditure relative to revenue.
The Urban Council and Regional Council, which operate through the Urban Services Department and Regional Services Department respectively, are financially autonomous. They draw up their own budgets and expenditure priorities. The expenditures of the two councils are financed mainly from a fixed percentage of the rates from property in the Urban Council area (Hong Kong, Kowloon and New Kowloon) and in the Regional Council area (New Territories). Additional income is derived from fees and charges for the services the councils provide.
The Hong Kong Housing Authority, operating through the Housing Department, is also financially autonomous. The government provides the authority with capital and land on concessionary terms to build public housing for rent and for sale. Part of the authority's recurrent expenditure, for clearances and squatter control, is financed from the General Revenue Account.
A trading fund is a department or part of one - providing services on a commercial or quasi-commercial basis through the operation of a separate accounting system. Unlike a vote-funded department, trading funds are allowed to retain revenue generated to meet expenditure in providing the services and to finance future expansion.
Government Supplies Department
Purchases of goods and related services required by government departments are undertaken centrally by the Government Supplies Department, which provides similar services to certain non-government organisations, such as the Hospital Authority and the Vocational Training Council. These goods and related services are normally obtained by competitive tendering, without giving preference to any