The Housing Authority has so far recorded a net surplus of $16.3 billion in the current financial year, nearly 10 times the previous year's figure, thanks to the $13 billion generated by the listing of the Link Reit. The figures were released yesterday as the authority approved the Housing Department's budget for 2006-07, when a $1 billion surplus is anticipated. Despite the surplus, Chung Shui-ming, chairman of the authority's finance committee, said the government did not plan an across-the-board rent reduction for public housing tenants. Net income from rental housing is expected to drop from $440 million to a deficit of $117 million in the 2006-07 financial year as the number of rental flats falls to 68,000, compared with 69,000 units in 2005-06. 'We have to spend the authority's money prudently,' Mr Chung said, adding it would spend nearly $700 million on repairing public housing blocks in the next few years. 'There is a large surplus this year, but this is mainly because of the Link Reit. Such a large windfall can't be expected every year.' The Link Reit listing raised $35 billion. Capital costs totalled $22 billion, which included $2 billion in legal administration costs, $4 billion in commissions, and $10 billion for internal staff deployment. The 2005-06 cash flow reached $50.2 billion because of the Link Reit sales, nearly triple the previous year's. The cash flow is expected to drop to $47.2 billion in 2006-07 and steadily increase up to $58.8 billion by 2009-10. A government source said last night: 'The government has to meet various expenditure needs ... If we do not control our spending, we will soon be overtaken by poverty.' Tam Wing-pong, deputy director of strategy, said nearly 400 housing staff would be laid off this year, bringing spending on wages down by $60 million.