XN000022-1997-03-06 — Page 2

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Government announces 1997-98 spending plans

The draft estimates of expenditure for 1997-98 published today (Thursday) provide for significant increases in spending to improve services in areas where they are most needed.

Announcing this today, the Secretary for the Treasury, Mr K C Kwong, said: "The detailed draft estimates reflect the consensus reached in the Budget Expert Group set up under the Sino-British Joint Liaison Group. They have been drawn up in accordance with our long established budgetary principle that, over time, government expenditure should grow no faster than the economy. And they are consistent with Article 107 of the Basic Law which requires the future Special Administrative Region to keep its budget commensurate with the growth rate of its gross domestic product."

"The draft estimates are a clear demonstration of the cooperation between the two sides in the Budget Expert Group. They provide funds not only for the continuity of government services throughout the financial year but also for significant improvements in services where they are most needed," he said.

Government expenditure for the new financial year will total $202.2 billion.

Mr Kwong explained that of the $202.2 billion, $154.4 billion was for recurrent expenses on existing and new services and $47.8 billion for capital projects.

"Our spending priorities have been decided after consultations held by the Financial Secretary with members of the Legislative Council and community groups during the past year," he said.

Some highlights of our priority spending areas are:

On social welfare our recurrent spending will grow to $19.5 billion.

The Government will be-providing -

For the Elderly

An extra 1546 residential places

21 Social Centres

4 Day Care Centres and

5 Multi-Service Centres