Relationship between Consolidated Account Expenditure and Public Sector Expenditure as defined for GDP purposes
Appendix C-Contd.
Table 5
Consolidated Account Expenditure has historically been used as a measure for control of Government's finances. Public Sector Expenditure is an economic definition used in the context of national accounts for GDP estimation. It excludes, for instance, government transfers and current expenditure of government “trading” departments. Since the two series of statistics have different components, they may move differently and the following table is intended to clarify the extent of this difference in movements.
Revised Estimate
Projection
1986-87
1987-88
1988-89
1989-90
1990-91
$mn
$mn
$mn
$mn
$mn
Total Consolidated Account Expenditure (from Table 4)
48,300
53,430
59,860
65,970
72,430
Add: Imputed rent (Note 1) and expenditure by other public
sector bodies not included in total Consolidated Account Expenditure (Note 2)
4,120
5,150
4,920
4,630
5,310
Deduct: Transfers:
-recurrent and capital subventions (Note 3)
(9,910)
(11,190)
(12,540)
(13,820)
(15,250)
other transfer payments made by Government (Note 4)
(4,920)
(5,150)
(5,650)
(5,630)
(5,280)
Current expenditure of government "trading" departments (Note 5)
Total Public Sector Expenditure (Note 6)
(5,560)
(5,990)
(6,680)
(7,330)
(8,080)
32,030
36,250
39,910
43,820
49,130
Growth in Public Sector Expenditure
Money terms
10.0%
13.2%
10.1%
9.8%
12.1%
Real terms
2.5%
5.5%
2.6%
2.3%
4.5%
Gross Domestic Product (calendar year) (Note 7)
291,900
321,700
354,500
390,700
430,600
Growth in GDP
Money terms
10.7%
10.2%
10.2%
10.2%
10.2%
Real terms
8.7%
5.5%
5.5%
5.5%
5.5%
Public Sector Expenditure as percentage of GDP (at current prices) (Note 8)
11.0%
11.3%
11.3%
11.2%
11.4%
Note 1
An estimate of the notional rent of premises owned by the Government and occupied by the non-trading government departments. Note 2 Capital expenditure by the Mass Transit Railway Corporation and the Kowloon-Canton Railway Corporation and current and capital expenditure by other public organizations such as the Vocational Training Council, Trade Development Council, Hong Kong Productivity Centre, Hong Kong Tourist Association and Consumer Council, etc.
Note 3
Note 4 Note 5
Financial assistance to government-assisted institutions in the private or quasi-private sector.
Expenditure on land acquisitions, compensations, purchases of properties, welfare payments, grants and loans etc. Government trading departments are distinguished from other government departments in that they are engaged in the production of goods and services principally for sale to the public. The criteria for distinguishing the trading activities of the Government from its other activities are (i) that the activity consists of the production of goods and services of a kind which might be provided by a private business, and (ii) that sales, either to the public or to other government departments, account for a major part of their activities. Some examples of departments regarded as being engaged in trading activities are Civil Aviation, Housing, Post Office and Water Supplies. Note 6 Total Public Sector Expenditure and its growth rates in this table are calculated on a fiscal year basis. These may, therefore, be
different from those calculated under a calendar year basis and quoted elsewhere in the Budget Speech.
Note 7 The GDP growth rates for the years 1987 to 1990 (and the GDP figures thus derived) are the trend projections used for medium-range
budgetary planning purposes. Fluctuations in economic activity from year to year are not taken into account.
Note 8
Caution should be exercised in interpreting these percentages as the Public Sector Expenditure is estimated on a fiscal year basis while the GDP is estimated on a calendar year basis.
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