XN000022-1997-03-13 — Page 8

Question 13 (in Chinese): Last year you projected for the reserves and surplus for 97/98. Now if you compare this to your present estimate for next year's surplus and reserves you find that there is an increase of over $30 billion. Why is it that this year's estimate shows a larger sum than last year's estimate? Is it because of your estimate of reduction in spending for non-recurrent projects?

Mr Donald Tsang (in Chinese); I think my Budget Speech has already mentioned this and it is because of non-recurrent revenues increase, especially with regard to stamp duty and land revenue and under-spending and so on and so forth,

Question 14 (in Chinese): But that is for 97/98, not 96/97. Last year your Budget also projected the reserves for 97/98 to be reaching $320 billion but this year your estimate is $360 billion. There is a difference of $40 billion.

Mr Donald Tsang (in Chinese): But the total is a cumulative figure. It is rolled on year on year and so what is in 96/97 will be added on in 97/98.

Reporter (in Chinese): But that should only show an increase of over $10 billion.

Mr K C Kwong (in Chinese): But what you said should mention the Land Fund. In 96/97, Mr Tsang in his Budget Speech then already mentioned clearly that because of the surplus in 96/97 the 96/97 surplus is $14 billion and for 96/97, if you look at land sales revenue it also showed an increase of over $20 billion over the original estimate. The over $20 billion in 96/97 is not totally reflected in the books in 96/97 because we have to share it with the Land Fund and that is why it is reflected only in 97/98, and together they already make over $30 billion. And just now you mentioned over $40 billion and so most of the $40 billion comes from the $30 billion and the minority of it comes from under-spending in the Capital Works Fund.

Reporter (in Chinese): But that only accounts for a small proportion but the difference is over $10 billion.

Mr K C Kwong (in Chinese): The two major figures are the ones I mentioned but of course there are other more minor figures.

Question 15 (in Chinese): Mr Tsang, you always stress that we should exercise discipline in fiscal management but you also said that the reserves should be at a level where one year's expenditure can be financed.

Mr Donald Tsang (in Chinese): This year the annual expenditure is over $200 billion. The fiscal reserve is only about $190 billion.

Question 16 (in Chinese): But what about the Land Fund?