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Following is the speech by the Secretary for the Treasury, Miss Denise Yue, in moving the second reading of the Supplementary Appropriation (1998-99) Bill 1999 in the Legislative Council today (Wednesday):

President,

I move that the Supplementary Appropriation (1998-99) Bill 1999 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 1998-99 have been finalised by the Director of Accounting Services. The expenditure charged to 32 heads out of a total of 90 heads is in excess of the sum originally appropriated for those heads in the Appropriation Ordinance 1998. In each head, the excess expenditure reflects supplementary provision approved by the Finance Committee or under powers delegated by it. The Supplementary Appropriation (1998-99) Bill 1999 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 32 heads of expenditure is $4,788.4 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 second instalment of the compensation payable to Hong Kong Telecom International of $3,350 million for the early surrender of its telecommunications licence and the payment of a one-off grant of $2,613 million to the Municipal Councils to compensate their loss in revenue as a result of the rates rebate in 1998-99.

Despite these two exceptional un-budgeted payments, total expenditure from the General Revenue Account was within the amount originally included in the Appropriation Ordinance 1998 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, June 23, 1999

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