Budget surplus stays on target

BUDGET estimates of a $7.7 billion surplus at the end of the financial year remain on target, despite a downturn in the property and stock markets, the Government said.

The falls in share and property prices in the past few months had made no significant impact on official estimates of revenue for the 1994-95 financial year, Secretary for the Treasury Donald Tsang Yam-kuen said yesterday.

He said one-quarter of the estimated total revenue came from profits tax, with salary tax contributing 13 per cent.

Revenue generated from stamp duty made a smaller contribution - seven per cent of total expected revenue, said Mr Tsang.

He noted that prices in land sales in the early months of last year had been higher than expected, and the overall income from land sales and stamp duty had not departed significantly from the estimates made in the current Budget.

Land sales are expected to fetch 13 per cent of total revenue this fiscal year.

Mr Tsang said the estimate on the revenue from land sales was not a target to be fulfilled.

'We won't alter our land sales programme in order to meet a certain target. For instance, if prices drop we put out more land to get more money. Therefore it is baseless to say the Government adopts a policy of high land prices,' he said.

Hong Kong people need not worry about the possibility that less money would go to the Treasury this year because of the drop in the property and stock markets, he said.

Mr Tsang, hotly tipped to be the first Hong Kong Chinese to be financial secretary, yesterday hosted the first press tour of his department, which has been handling sensitive financial data and preparing the next Budget.

His top aides took turns to brief reporters on how they collected and spent the money.

Mike Arnold, Principal Assistant Secretary for the Treasury in charge of public works, said major underspending by government departments before 1992 had ceased over the past two years.

'It's very much on target this year,' he said.

Lesley Wong, another Principal Assistant Secretary whose job is to fix the levels of the more than 5,000 government charges and fees, said postal fees were under review in accordance with the principle of cost recovery.

Water charges will rise by eight per cent this year under the new scheme on the rate of returns for public utilities adopted by the Government.

Mrs Wong said officials would largely take the inflation rate as an index in the review of charges and fees.

But the timing of increases in major public utilities and services would be carefully chosen to reduce pressure on the public, she said.