Gov't expenditure to rise 6%

February 01, 2012

Financial Secretary John Tsang has forecast the Government's operating expenditure for 2012-13 will be $315 billion, up 6% on the revised estimate for 2011-12.
 
Delivering his 2012-13 Budget today, Mr Tsang said recurrent expenditure will be $264.3 billion and capital expenditure will be $78.7 billion, including an all-time high of $62.3 billion on capital works.
 
The revised estimate for government revenue for 2011-12 is $433.1 billion, $63.4 billion higher than the original estimate. The revenues from profits tax and salaries tax have increased by nearly $30 billion compared to the original estimate. The sale of land brought in $83.1 billion, nearly $21.1 billion higher than the original estimate.
 
Taking into account operating and capital expenditure, he forecast government expenditure will reach $393.7 billion, up 7% on the revised estimate for 2011-12.
 
Public expenditure will be equivalent to 21.4% of GDP. By March 31, the fiscal reserves are expected to be $662.1 billion, equivalent to 35% of GDP or 22 months of government expenditure.
 
Total government revenue for 2012-2013 is estimated to be $390.3 billion. Earnings and profits tax, estimated at $161.6 billion, will still be the major source of revenue. Land revenue is estimated at $60 billion. Recurrent expenditure is estimated to grow by 33% during this period.
 
Mr Tsang said there will be a small deficit in the accounts in the coming years, but fiscal balance will largely be achieved. Fiscal reserves are estimated to be $658.7 billion by end-March 2013, representing 34% of GDP or 20 months of government expenditure.
 
"In this highly uncertain global economic climate, we will hand over a healthy set of accounts to the next Government," he said.