The revised deficit of $32.3 billion for the current year almost equals the loss of revenue from the suspension of land sales.
The original budget surplus of $10.7 billion was revised to a $21.4 billion deficit last June after a crisis package was announced. The suspension of land sales led to a loss of $32.2 billion.
Other factors contributing to the deficit include shortfalls in profits tax of $3.8 billion, in stamp duty of $3.3 billion, in betting tax of $2.3 billion, and in rates, duties, vehicle taxes, and fees and charges totalling $4.4 billion.
These shortfalls have been partially offset by improved income from the investment of the fiscal reserves with the Exchange Fund.
The investment earnings on the fiscal reserves in 1998-99 are forecast to be $36 billion, $9.3 billion more than previously estimated.
Taking all this into account, revenue for the year will be $220.6 billion, $38.4 billion lower than estimated. Total expenditure is expected to amount to $245.1 billion, $3.1 billion lower than estimated.
Some $4.2 billion was not spent due to reduced pension payments since fewer people retired in 1998.
A further $4 billion was underspent due to modest slippage in capital works projects and lower land compensation values due to the economic downturn.
The suspension of provision of sites to the Housing Society for sandwich class housing also led to a saving of $6.8 billion.
However, this underspending has been largely offset by the $3.4 billion compensation to Hongkong Telecom for early surrender of its exclusive telecommunications licence; the $2.6 billion given to the municipal councils to compensate for their loss of revenue in the rates refund in June; and $6 billion injected into the West Rail project.
Additional tax rebates worth a total of $8.5 billion pushed the deficit to $32.3 billion.