XN000022-1984-02-29 — Page 8

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WEDNESDAY, FEBRUARY 29, 1934

$3.3 BILLION DEFICIT EXPECTED

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THE BUDGET DEFICIT FOR THE CURRENT FINANCIAL YEAR IS EXPECTED TO BE ABOUT $3.3 BILLION, COMPARED WITH THE ENVISAGED DEFICIT OF $3.2 BILLION, THE FINANCIAL SECRETARY, THE HON SIR JOHN BREMRIDGE, SAID TODAY IN THE LEGISLATIVE COUNCIL.

BOTH REVENUE AND EXPENDITURE WOULD BE APPRECIABLY LOWER THAN ORIGINALLY EXPECTED, SIR JOHN EXPLAINED.

THE REVISED ESTIMATES ARE $30.3 BILLION FOR REVENUE AND $33.6 BILLION FOR EXPENDITURE.

+STATISTICALLY SPEAKING, THIS IS VERY CLOSE TO THE ESTIMATE. IT REPRESENTS MUCH HARD WORK BY ALL CONCERNED. THE BASIC BUDGETARY DILEMMA EMERGES FROM THE FACT THAT TOTAL REVENUE IN 1983-84 WILL ACTUALLY BE LOWER THAN IN BOTH THE PREVIOUS YEARS,+ HE POINTED OUT.

ON RECURRENT ACCOUNT, REVENUE IN 1983-84 IS EXPECTED TO BE $1.56 BILLION LOWER THAN THE ORIGINAL ESTIMATE.

THIS SHORTFALL ARISES LARGELY FROM LOWER THAN EXPECTED YIELDS FROM BOTH DUTIES AND MOTOR VEHICLE FIRST REGISTRATION TAX (WHERE RESISTANCE TO THE NEW RATES WAS HIGHER THAN EXPECTED), FROM EARNINGS AND PROFITS TAX AND FROM STAMP DUTIES.

HOWEVER, THE REVISED ESTIMATE OF RECURRENT EXPENDITURE IS ALSO EXPECTED TO BE $528 MILLION LOWER THAN THE ORIGINAL ESTIMATE, REFLECTING THE MODERATE LEVEL OF THE 1983 CIVIL SERVICE SALARIES ADJUSTMENT AND TIGHT FINANCIAL CONTROL.

+THIS IS THE SECOND YEAR RUNNING IN WHICH RECURRENT EXPENDITURE HAS BEEN HELD DOWN BELOW BUDGET,+ SIR JOHN POINTED OUT, THANK ING ALL VOTE CONTROLLERS FOR THEIR EFFORTS.

ON CAPITAL ACCOUNT, HE SAID, REVENUE IS EXPECTED TO BE $427 MILLION LOWER THAN THE ORIGINAL ESTIMATE.

HE EXPLAINED THAT THIS WAS BECAUSE OF LESS THAN EXPECTED REVENUE FROM LAND TRANSACTIONS, OFFSET PARTIALLY BY A TRANSFER OF $250 MILLION FROM THE EXCHANGE FUND TO COMPENSATE FOR THE LOSS OF REVENUE RESULTING FROM THE REMOVAL OF THE TAX ON INTEREST EARNED ON HONG KONG DOLLAR DEPOSITS.

CAPITAL EXPENDITURE, ON THE OTHER HAND, IS EXPECTED TO BE $1.3 BILLION LOWER THAN THE ORIGINAL ESTIMATE.

SIR JOHN NOTED THAT THIS RESULTED MAINLY FROM SLOWER THAN EXPECTED EXPENDITURE ON CAPITAL WORKS, PLUS AN INCREASE IN DEVELOPMENT LOAN FUND REVENUE, WHICH HAD ENABLED REDUCTIONS TO BE MADE IN THE TRANSFERS TO FUNDS.

THE INCREASE IN THIS REVENUE, HE ADDED, HAD RESULTED FROM THE PURCHASE BY THE EXCHANGE FUND OF THE DEVELOPMENT LOAN FUND'S EQUITY HOLDINGS.

THE DENICIT