XN000022-1976-07-02 — Page 6

FRIDAY, JULY 2, 1976

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HONG KONG GOVERNMENT ACCOUNTS FOR MARCH 1976

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THE HONG KONG GOVERNMENT ACCOUNTS FOR THE MONTH OF MARCH 1976 SHOWED A DEFICIT OF $184 MILLION.

TOTAL REVENUE FOR THE MONTH WAS $648 MILLION AND TOTAL EXPENDITURE WAS $832 MILLION.

THIS DEFICIT HAS REDUCED THE ACCUMULATED SURPLUS OF $407 MILLION AT THE END OF THE FIRST ELEVEN MONTHS (EXCLUDING LOAN RECEIPTS) TO $223 MILLION FOR THE FULL FINANCIAL YEAR 1975-76.

THE APPROVED ESTIMATES FOR THE YEAR ORIGINALLY ENVISAGED A DEFICIT OF $431 MILLION. A YEAR LATER, WHEN PRESENTING THE REVISED ESTIMATES FOR 1975-76 IN HIS RECENT BUDGET SPEECH, THE FINANCIAL SECRETARY THOUGHT THE FINAL OUTTURN OF REVENUE AND EXPENDITURE WOULD MORE OR LESS BE IN BALANCE AND HE ASSUMED A NOMINAL DEFICIT OF ONLY $50 MILLION. HE INFORMED THE LEGISLATIVE COUNCIL THAT THIS CHANGE IN THE ESTIMATED OUTTURN WAS MAINLY THE RESULT OF A LOWER LEVEL OF EXPENDITURE ON PUBLIC WORKS. THERE WERE FIVE REASONS FOR THIS LOWER LEVEL OF EXPENDITURE :-

* LOWER TENDER PRICES AND LOWER PAYMENTS ON EXISTING

CONTRACTS AS A RESULT OF WAGES AND MATERIALS

*

FLUCTUATION CLAUSES WORKING IN THE GOVERNMENT'S FAVOUR. THIS WAS THE MOST SIGNIFICANT REASON AND IT AFFECTED THE RATE OF EXPENDITURE NOT THE AMOUNT OF WORK DONE.

LOWER COMPENSATION PAYMENTS BECAUSE OF DELAYS IN CLEARANCES WHICH, IN TURN, RESULTED IN DELAYS IN WORKS STARTING AND LOWER RESUMPTION PAYMENTS BECAUSE MORE LESSEES OPTED FOR LAND EXCHANGE RATHER THAN CASH,

* THE UNUSUALLY HEAVY RAINS IN THE SUMMER OF 1975

SLOWING DOWN CONSTRUCTION WORK.

* LATER THAN EXPECTED STARTS ON NEW PROJECTS PARTICULARLY BECAUSE, FOR THE FIRST TIME, THE BUDGET DEBATE EXTENDED INTO THE NEW FINANCIAL YEAR.

* DELAYS IN DELIVERIES OF EQUIPMENT FROM OVERSEAS.

DELAYS HAVE THE EFFECT OF DEFERRING PAYMENT TO THE FOLLOWING FINANCIAL YEAR.

THESE

HE ALSO DREW THE ATTENTION OF THE LEGISLATIVE COUNCIL TO

HE THE LOWER LEVEL OF EXPENDITURE ON EDUCATION SUBVENTIONS. ATTRIBUTED THIS SHORTFALL PARTLY TO SCHOOL MANAGEMENTS CLOSING MORE SURPLUS PRIMARY CLASSES THAN EXPECTED AND PARTLY TO FEWER SECONDARY CLASSES OPENING.

/COMMENTING