WEDNESDAY, FEBRUARY 26, 1986
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$98 MILLION SURPLUS SHOWN FOR THIS YEAR
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THE GENERAL REVENUE ACCOUNT FOR 1985-86 NOW SHOWS AN ESTIMATED SURPLUS OF $98 MILLION COMPARED WITH THE BUDGETED DEFICIT OF $961 MILLION, THE FINANCIAL SECRETARY, SIR JOHN BREMRIDGE, ANNOUNCED TODAY.
SIR JOHN WAS PRESENTING THE 1986-87 BUDGET, HIS FINAL BUDGET.
HE DESCRIBED THE SWING AS RELATIVELY INSIGNIFICANT GIVEN TOTAL REVENUE PLUS EXPENDITURE OF ABOUT $80 BILLION, REVENUE HAD BEEN UNEXPECTEDLY BUOYANT AND RECURRENT EXPENDITURE WAS BELOW BUDGET.
+THIS IS THE LUCK OF ONE YEAR'S DRAW. WE MUST ANTICIPATE OPPOSITE SWINGS, THE NEED TO SMOOTH ONE YEAR WITH ANOTHER IS CLEAR, HE SAID.
SIR JOHN SAID HIS NEW BUDGET WAS SHAPED BY AN ANNUALLY UPDATED FIVE YEAR MEDIUM RANGE FORECAST OF PUBLIC FINANCES.
+DURING THE FINANCIAL YEAR 1982-83 OUR REVENUE DROPPED PRECIPITOUSLY MAINLY BECAUSE OF THE COLLAPSE OF THE REAL ESTATE MARKET. THE ADVERSE BUDGETARY SWING WAS OVER $9 BILLION IN JUST ONE YEAR. IT WAS NEARLY MUCH MORE. WE THEREAFTER FACED THE VICISSITUDES BROUGHT ABOUT BY ACKNOWLEDGED AND INEVITABLE POLITICAL UNCERTAINTIES AGAINST A BACKGROUND OF A GENERAL WORLD RECESSION. BANKING AND CURRENCY PROBLEMS WERE ONLY PART OF THE STORY.+
SIR JOHN SAID THAT WHERE POSSIBLE AND APPROPRIATE, IT HAD ALWAYS SEEMED FAR SIGHTED TO BUILD UP WORKING RESERVES, WHICH IN THE PRESENT CONTEXT MEANT THE BALANCES IN THE MAJOR FUNDS. TO THIS END, THE CAPITAL WORKS RESERVE FUND WAS ESTABLISHED IN EARLY 1982.
+AS IS THE GENERAL RULE FOR GOVERNMENTS, THE HONG KONG GOVERNMENT'S ACCOUNTS ARE ATTUNED TO CASH ACCOUNTING. AT THE START OF NEXT FINANCIAL YEAR. THE BALANCES IN THE FUNDS WILL HAVE INCREASED BY $1.7 BILLION. THEY FORM IN EFFECT OUR FIRST LINE OF DEFENCE AGAINST POSSIBLE FUTURE UNTOWARD TURNS IN AFFAIRS OUTSIDE OUR CONTROL, WHICH COULD LEAD TO DOMESTIC CASH FLOW PROBLEMS.
+THIS OUTCOME, INTER ALIA, REFLECTS RATIONAL TREATMENT OF WINDFALL LAND REVENUE IN 1985-86 OF A CAPITAL NATURE, WHICH WILL BE SOME $2.5 BILLION MORE THAN EXPECTED.+
/SIR JOHN
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