HK$59.5b surplus for first nine months

PUBLISHED : Wednesday, 01 February, 2012, 12:00am
UPDATED : Wednesday, 01 February, 2012, 12:00am


The government yesterday declared a HK$59.5 billion budget surplus for the first nine months of this financial year, far exceeding last February's full-year budget prediction of a HK$3.9 billion surplus.

The news came a day before Financial Secretary John Tsang Chun-wah's final budget speech today.

Tsang's record in underestimating the government's fiscal performance is likely to continue, as Raymond So Wai-man, dean of the business school at Hang Seng Management College, said the full-year surplus could reach HK$80 billion.

For the previous fiscal year, the government had forecast a HK$25.2 billion deficit. But it turned out to be a HK$75.1 billion surplus instead.

Accounting firms such as Deloitte, Ernst & Young and PricewaterhouseCoopers have predicted that this fiscal year's surplus would range between HK$53 billion and HK$60 billion.

They said higher-than-expected income from land sales and additional stamp duties from the property market and stock deals in the first half of the financial year contributed to the surplus.

Hong Kong's fiscal reserves now stand at HK$654.9 billion - a record high since the handover in 1997.

A government spokesman said the surplus was bolstered by the Exchange Fund's investment earnings of HK$37 billion. The latest figures, however, do not include a HK$7 billion injection into a fund to help develop the city's elite athletes.

The revised estimates for the current financial year, which ends in March, will be released alongside today's budget speech, according to the spokesman. 'The government will receive the salary and profit tax income in the final quarter of the financial year,' So said.

The fiscal surplus will add to the pressure on the government to offer more budget handouts.