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The 1994-95 outturn
Expenditure this year will be $165.8 billion, some $3.1 billion less than the original forecast a difference of less than two per cent, the Financial Secretary, the Hon Sir Hamish Macleod, said today (Wednesday) in the Legislative Council.
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Sir Hamish noted in his Budget Speech that underestimating surpluses had a long history in Hong Kong but this year's was on target as the surplus for 1994-95 was in line with the original estimate of $7.7 billion.
"In overall terms, this outcome has arisen because modest underspending has been offset by equally modestly reduced revenue," he said.
Sir Hamish pointed out that some $2.0 billion of the underspending was due to reduced equity injections into the Provisional Airport Authority and MTRC as a result of the protracted negotiations on the airport financing package.
There had also been underspending of $3.5 billion from the Capital Works Reserve Fund because of delays in land resumption and slippage in capital works.
However, this was partly offset by the fact that expenditure from the Loan Fund would be $3.1 billion more than forecast, mainly because of loans granted to the Housing Society to meet the land premia due for sites under the Sandwich Class Housing Scheme (for which no provision was made in the original estimate).
The underspending of $3.5 billion from the Capital Works Reserve Fund was less than 11 per cent of the original estimate (excluding debt interest and repayment of $2.4 billion). In percentage terms, this level of underspending was a further continuation of the much improved performance achieved in 1993-94.
He said: "Members will recall the severe underspending which we experienced in 1991-92 and 1992-93 and the steps which we have taken to overcome this problem.
"Given the lead time required for major capital projects, it will be some time before we see the full impact of our remedial measures reflected in actual spending performance.
"Nevertheless, considerable progress has already been achieved."
Sir Hamish said expenditure in 1994-95 represented a growth of around 40 per cent in real terms over the level in 1991-92.