It was not clear where and when such surpluses would be spent or indeed if they would ever be spent. Hence, then, the rationale for calling for personal and corporate tax cuts (because, for instance, there were significant surpluses) and, hence, the focus on surpluses.

That policy no longer prevails; and certainly the prospect of abundant surpluses no longer exists. Surpluses yes, healthy surpluses, perhaps. Abundant surpluses, no.

The planned, and in my view essential, infrastructural expenditure for the rest of this decade will not only result in deficits in several forthcoming years, but will also eat significantly into our fiscal reserves - so much so that the real values of those reserves will plunge.

Compare, for example, the General Revenue Reserves position at March 31, 1993, with that predicted in last year's Budget for March 31, 1997. The level of reserves as a percentage of planned spending for the subsequent year - for 1992-93 and 1997-98 - will have fallen from 86 per cent to 35 per cent. A real fall, in real terms, in our General Reserves.

Curiously, the Government in making similar comparisons actually compares the levels of reserves with actual spending of the previous year. The Government therefore sees the level of reserves falling from a high of 105 per cent at March 31, 1993, to 41 per cent at March 31, 1997! I would, however, argue that a comparison to future spending is much more relevant.

Whichever measure is used, the reserves will, in real terms, fall - unless, of course, there are abundant surpluses in the next three years. That is unlikely, no matter how ''booming'' are the stock and property markets.

It has been suggested that such booming markets will provide a large surplus for 1993-94 and result in only a modest deficit for 1994-95. If true, then it will have much to do with a lack of anticipated spending, than it has to do with buoyant revenues.

To put the issue into some perspective, the Government's yield from stamp duty for 1993-94 will increase from an original estimate of $10 billion to perhaps $13 to $14 billion.

A nice little earner to be sure, but far short of the huge effect that the recent ''boom'' seems to have created in people's minds.

That extra $3 to $4 billion from stamp duty will represent only two per cent to three per cent of total government revenue for this year.

Such buoyancy in the markets may have a knock-on beneficial effect to the Government's profits tax yields for next year, on the basis that gains have been earned, although perhaps not realised, by Hong Kong taxpayers.

A quick look at who has been investing in the Hong Kong Stock Exchange over the past year will quickly dispel that hope.

Few, if any, of those overseas investors are likely to pay any Hong Kong profits tax. As for gains made on Hong Kong real estate, the big players have consistently shown their adeptness at avoiding taxation, usually by successfully crafting those gains as capital profits.

So, unless Sir Hamish intends to introduce some form of capital profits tax, the boost to government coffers as a result of the ''booming'' market is only likely to be ''healthy'' rather than ''abundant''.

This is potentially a one-off phenomenon for 1993-94. For 1994-95 it may be imprudent to expect a repetition. Hence, the anticipated yields from stamp duty are likely to be less than those derived this year.

The real key to the level of this year's surplus and next year's deficit lies in the spending.

So, the section of Sir Hamish's Budget speech that will be of most interest will not be revenue measures, simply because, other than a 10 to 15 per cent increase in personal allowances and perhaps some band stretching, I do not expect there to be any.

Rather, it will be the 1992-93 outturn, which deals with expenditure; disclosing whether the Secretary for Works in his new role of ''Mr Big Spender'' has succeeded and whether there can be a reasonable expectation that he will similarly succeed next year.

The government's revenue-raising machinery is in good order and has now for many years consistently provided more-than-adequate revenues to meet expenditure needs and provide surpluses, and so reserves, for future needs.

The revenue gathering is sound and robust and the need for alternative sources of revenue is unnecessary.

What must be achieved and maintained for the budgetary process are consistent levels of spending. We shall see on March 2. Marshall Byres is chairman tax services of Ernst and Young