TNAG-1641-FCO40-2288-Budget-of-Hong-Kong-1987 — Page 38

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57.

56.

The size of the

determinant of Government's

civil service remains the major

spending, and the December on

is within the planning target and

December growth rate of 2% reflects both firm control and further implementation of our successful programme of value for money studies.

was, last year, some cause for

As to

there revenue,

revenue

prospects

pessimism over

given the

less

than

satisfactory economic performance in 1985 and its expected

I

am

tax receipts.

be able pleased to the rapid recovery in 1986 exceeded

lagged effect

on

record, however,

that

expectations

and, as

to

our

I have said, this has generated

considerable improvements in those revenue areas most closely

linked to economic performance.

58.

The most significant gains have come from profits tax,

salaries tax

tax and stamp duty which, together, are estimated to Profits and

yield a total of $2.8 billion more than budgetted. salaries tax yields have grown ahead of even the preliminary

estimate

resurgence

of

GDP

in the

for growth

profits

1986,

of

reflecting both

and property

export

a

major

oriented

businesses, and substantial salary increases. As to stamp duty, the turnover on the stock market has been running well ahead of the level of the previous few years.

some

term significance, 59.

Of less long

have been there

early repayments of debts due to Government amounting to a total of $0.9 billion. About half of this is due to repayment of the

to referred remaining KCR debt, which was

a possibility in

last year's budget (17).

as

60.

from Variance

estimates in other

areas revenue

is

relatively minor,

Overall,

and the

items largely offset each other.

is revenue

now forecast to be some $4 billion higher

than previously expected representing a gain of 8% excluding the early debt repayments, or 10% if they are taken into account.

(17) 1986 Budget Speech, paragraph 76.

17

/61. Net