Hong Kong's budget surplus underestimated for eighth year in a row
Financial Secretary John Tsang Chun-wah yesterday continued his unbroken streak of being wrong, revealing for the eighth year in a row that he had inaccurately predicted the city's budget.
As Tsang unveiled his new budget yesterday, he said the city would see a surplus of HK$63.8 billion for the financial year ending on March 31 - six times higher than his original projection of HK$9.1 billion.
The financial chief also predicted that the government in the next financial year would have a surplus of HK$36.8 billion, more than 40 per cent lower than this year. Tsang has not predicted a budget accurately since he became financial secretary in 2007.
Industrial sector lawmaker Lam Tai-fai criticised Tsang for miscalculating the figures, and warned that it would "cause the misallocation of public resources". He said the inaccurate predictions would obfuscate the city's long-term economic forecast, and hinder planning measures. The final estimate for this financial year put the government's revenue at HK$470.7 billion, which is HK$40.6 billion higher than originally forecast. The government is also expected to spend HK$397.2 billion.
Tsang attributed the unexpected surplus in part to stamp duty revenue, which he said had been HK$29.7 billion higher than first estimated.
The government's expenses were also lower than expected, likely finishing the year at HK$397.2 billion, some HK$14 billion lower than predicted.
A government source said that the government spent HK$2.3 billion less than anticipated because of the delay in the MTR's HK$71.5 billion high-speed rail link to Guangzhou.
A further HK$2 billion was originally earmarked for social security allowance for new immigrants, after the Court of Final Appeal ruled in 2013 that they only needed to wait for a year before they could apply for welfare.
But the money was not spent, because by July last year only about 3 per cent of those who became eligible had applied for the allowance.
Filibustering in the Legislative Council also delayed 27 works projects, the source said, lowering government spending even further.
For the next financial year, Tsang estimated the government would spend a total of HK$440.8 billion, 11 per cent more than last year and equivalent to 20.4 per cent of the gross domestic product.
The government is expected to take in HK$477.6 billion in revenue, making for an estimated surplus of HK$36.8 billion.
Tsang said the government would likely run a surplus for the next five years, but that it should prepare for economic pressure from an ageing population.