- 30
"Only in the coming financial year, when our investment in the Airport Core Programme peaks, will it be necessary to draw on our reserves, and even then to a much smaller extent than previously expected," he said.
"We shall continue to see a healthy surplus on our operating account throughout the forecast period."
Sir Hamish said there were two main reasons for this improvement in the financial prospects compared with the earlier forecast.
"First, rising interest rates add to the earnings which our fiscal reserves
generate.
"Secondly, on the expenditure side, the forecast reflects a more realistic assessment of our capacity to increase spending on public works.
"Thus, we are now assuming a level of spending below that predicted in the previous Medium Range Forecast," he said.
Sir Hamish also explained that the forecast was based on two assumptions: GDP growth would maintain at 5 per cent and a conservative approach to the forecasts of revenue from land premia.
End/Wednesday, March 1, 1995
Reserves in 1997
The Government's fiscal reserves on March 31, 1997, shortly before the transfer of sovereignty, will stand at an impressive $151 billion, the Financial Secretary, the Hon Sir Hamish Macleod, said in the Legislative Council today (Wednesday).
"This is a very reassuring cushion, and some $31 billion more than I was forecasting a year ago."
Sir Hamish noted that the future Special Administrative Region (SAR) Government would receive the full proceeds from land sales, and would collect rents. from the extension of New Territories leases from July 1, 1997.