The government could receive between HK$5 billion and HK$10 billion more in investment gains in the 2010-11 fiscal year than it had forecast, as economic conditions and financial markets improve. The relatively rosy outlook means the government's share of investment income from the Exchange Fund could be about HK$30 billion in the coming fiscal year compared to the official forecast of HK$22.9 billion. In 2009/10, the government received HK$33.5 billion from the fund, HK$2.1 billion more than it had expected. The fiscal year is from April 1 to March 31. Tim Lui Tim-leung, a tax partner with accounting firm Pricewaterhouse-Coopers, said the additional income will likely see the government record less severe budget deficits or even small surpluses. A deficit of HK$39.8 billion was projected for this fiscal year but many now expect a deficit of about HK$10 billion or less. The 2010/11 budget has a forecast of a HK$25.07-billion deficit. A deficit of HK$38.9 billion was recorded for the first eight months of this fiscal year. A six-year rolling average of the fund's investment return is used to estimate the government's income from the fund in any given year. This method of calculation is used to help reduce large fluctuations in investment income during the peak and trough of economic cycles, which can last between five and 10 years, KPMG tax partner Jennifer Wong How-yee said. Although the government usually reinvests the income in the fund instead of pocketing it, the potential windfall will likely elicit public calls for handouts. Wong said some HK$15 billion could be set aside for one-off relief measures in 2010/11. She said the government could consider exempting government rates up to HK$1,500 for two quarters, and refunding half of people's tax bills up to a maximum of HK$6,000 each. The financial secretary will deliver his budget speech on February 24. When asked whether the robust return from the fund would allow the government to hand out more sweeteners in the coming budget, Financial Secretary John Tsang Chun-wah appeared cautious. 'Government money should be spent appropriately. We hope there will be measures to help those in need,' Tsang said. Asked about the impact of the resignation of five pan-democrats on support for the budget, Tsang said he 'never worried about the possibility of the budget not being passed'.