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Following is a speech by the Secretary for the Treasury, Miss Denise Yue, in moving the second reading of Supplementary Appropriation (1997-98) Bill 1998 in the Legislative Council today (Wednesday):

Madam President,

I move that the Supplementary Appropriation (1997-98) Bill 1998 be read the second time.

Section 9 of the Public Finance Ordinance states that "If at the close of account for any financial year it is found that expenditure charged to any head is in excess of the sum appropriated for that head by an Appropriation Ordinance, the excess shall be included in a Supplementary Appropriation Bill which shall be introduced into the Legislative Council as soon as practicable after the close of the financial year to which the excess expenditure relates".

The expenditure accounts for the financial year 1997-98 have been finalised by the Director of Accounting Services. The expenditure charged to 40 heads out of a total of 90 heads is in excess of the sum originally appropriated for those heads in the Appropriation Ordinance 1997. In each head, the excess expenditure reflects supplementary provision approved by the Finance Committee or under powers delegated by it. The Supplementary Appropriation (1997-98) Bill 1998 seeks final legislative authority for the amount of supplementary provision approved during the year in respect of particular heads of expenditure by the Finance Committee or under powers delegated by it.

The total supplementary appropriation required in respect of the 40 heads of expenditure is $10,731.9 million. In addition to the normal increases resulting from the annual pay adjustment and the inflation related adjustments to the Comprehensive Social Security Assistance and Social Security Allowance schemes, the supplementary appropriation is largely attributable to two payments for which no provision was made in the original estimates. These were the payment of $5,000 million to set up the Quality Education Fund and the first instalment of the compensation payable to Hong Kong Telecom International of $3,350 million for the early surrender of its telecommunications licence.

Despite these two exceptional un-budgeted payments total expenditure from the General Revenue Account was only $1,503.3 million greater than the amount originally included in the Appropriation Ordinance 1997 as a result of savings in various heads of expenditure and the provision made for additional commitments in the original estimates for the year.

End/Wednesday, July 15, 1998

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