Budget surplus may exceed forecast figure

PUBLISHED : Saturday, 01 March, 2008, 12:00am
UPDATED : Saturday, 01 March, 2008, 12:00am

The government budget surplus has topped HK$122 billion, raising the possibility that the actual year-end figure will exceed the HK$115.6 billion forecast by Financial Secretary John Tsang Chun-wah.

Just two days after Mr Tsang delivered the budget, the government yesterday announced that at the end of January the surplus was HK$122.6 billion.

With the financial year ending on March 31, Democratic Party vice-chairman Sin Chung-kai said the government might end up with a surplus higher than Mr Tsang's estimate.

Mr Sin said that although government expenditure in February and March might cost HK$40 billion in total, he believed revenue from stamp duty, profits tax and other proceeds in the period could make it up.

He urged the finance chief to consider additional budgetary measures such as providing interest-free loans to associate degree students, and giving more resources for elderly home bed spaces to shorten the waiting list.

A government spokesman said it stood by its surplus forecast. 'Taking into account the forecast financial results for February and March, we expect the overall surplus for 2007-08 will be HK$115.6 billion,' he said.

Speaking after a radio phone-in programme yesterday, Mr Tsang said the government would look for ways to broaden the narrow tax base.

Citing the result of a review on the tax base conducted in 2006, he said: 'People at the time didn't like GST [goods and services tax], but there's no clear view what we should do ... some people suggested a green tax and luxury tax.'

Asked whether there was an urgency to introduce a GST, Mr Tsang said: 'It is clear that the community does not like GST. We need to further study if there are other tax options.'

Facing criticisms that his maiden budget did not do enough for some sectors, Mr Tsang said the budget was 'quite balanced' and he would take all comments into consideration.

But it was unlikely the budget would be amended.

'If we move something, we have to move other things, otherwise it's going to be skewed,' he said.

'So I don't have a great tendency towards changing any one of the different aspects. This is a basket.'

Asked by a civil servant caller whether a pay rise could be expected this year, Mr Tsang said a rise was very likely, but an increase of 10 per cent would be just wishful thinking.

'There will be pay rise but I don't know how much.'