But in Wednesday's budget speech, he revised that forecast to show a HK$13.8 billion surplus, thanks largely to the rebound in land and stamp duty revenues.

In response, Tsang did his best to come across as everyone's favourite rich uncle, doling out some HK$20 billion in one-off give-aways.

This is the third year in a row the government has dispensed such goodies from its coffers, handing out tax rebates, rent holidays and property rate waivers. As a result, a lot of people are wondering why Tsang did not do the obvious thing this week and make his generosity permanent by cutting taxes and rates.

He could certainly afford to. Tsang is currently sitting on fiscal reserves of HK$508 billion. But even that huge sum is only half the story. The government's Exchange Fund has an additional accumulated surplus worth HK$553 billion at the end of December last year.

Just to be clear, that is over and above the money the Exchange Fund holds as reserves to back Hong Kong's currency peg. It is on top of assets held against the aggregate balance and Exchange Fund note issues. And it is entirely separate from the government's fiscal reserves, which the Exchange Fund also manages.

As a result, Tsang is nursing a total pot of reserves worth well over HK$1 trillion. To put that sum into perspective, it amounts to an astonishing HK$457,000 for each and every household in the city. Or to put it another way, it is equal to 65 per cent of Hong Kong's gross domestic product last year. In contrast, most other developed economy governments are currently sitting on debts - not assets - of 65 per cent of GDP or more.

But despite the government's embarrassment of riches, you will be severely disappointed if you think Tsang ought to share some of that wealth with the city's people.

Quite the reverse, as his budget projections this week illustrated, the financial secretary is extremely reluctant to dip into Hong Kong's accumulated reserves even to fund the government's massive programme of infrastructure spending.

Over the next few years, Tsang is planning to spend well over HK$50 billion a year on a series of grand infrastructure projects including the Zhuhai bridge, a high-speed rail link to Shenzhen and a cruise ship terminal on the site of the old Kai Tak airport. As a result, the government's capital spending account, from which infrastructure works are funded, will plunge heavily into the red for the next five years, notching up forecast deficits of HK$21.4 billion for the 2010-11 fiscal year and HK$36 billion in the following year.

But as the first chart below shows, although Tsang expects to run a sizeable overall deficit next year, after that he expects the government's consolidated balance to improve markedly, swinging back into surplus by 2013-14, even though the capital account will still be in the red.

The reason is a remarkable forecast improvement in the state of the government's operating account, which includes recurrent revenues and expenditure.

The second chart shows where this turnaround is expected to come from. The government's operating expenditure is projected to grow by between 4 and 6 per cent over the next few years. But its operating revenues - derived mainly from taxes - are projected to grow by a hefty 15 per cent for the 2011-12 fiscal year.

On top of the revenue growth generated naturally by Hong Kong's underlying economic growth, that means Tsang will need to generate an extra HK$20 billion or so in operating revenue if he is to meet his projections.

There is only one likely source for that windfall. In his next budget, it looks very much as if Tsang is planning to claw back the goodies he handed out on Wednesday, discontinuing the tax rebates and rent waivers we have enjoyed in recent years, in order partially to fund the massive capital account deficits run up by government infrastructure spending without dipping too deeply into reserves.

Once a miser, always a miser.