Overview

* Government spending in 2001-02 will amount to $252.7 billion, an increase of $26.6 billion or 10.8% in real terms over the latest estimated spending for 2000-01.

* The growth of government spending proposed for 2001-02 is in line with the spending guideline laid down by the Financial Secretary in his Budget Speech last year.

* The growth in government expenditure plus the re-deployment of savings under the Enhanced Productivity Programme will allow us to meet on-going commitments, demand for additional services and new as well as improved services, investments in our infrastructure, and all the initiatives announced by the Chief Executive in all his Policy Addresses.

* Of the government spending in 2001-02, recurrent expenditure will amount to $203 billion, an increase of $16.4 billion or 7.9% in real terms over the latest estimated spending for 2000-01.

* Capital government expenditure in 2001-02 will amount to $49.7 billion, an increase of $10.2 billion or 24.6% in real terms over the latest estimated spending for 2000-01.

* Total public expenditure, that is government spending as well as expenditure by the Housing Authority, the five Trading Funds and the Lotteries Fund, will amount to $290.7 billion in 2001-02. This is equal to 21.4% of GDP.

Recurrent Expenditure

* The largest areas of recurrent spending in 2001-02 are : education, health, social welfare and security, as is the case in previous years.

* Recurrent spending on education will amount to $47.6 billion, an increase of $3 billion or 5.5% in real terms compared with the latest estimated spending for 2000-01.

* Recurrent spending on health will amount to $31.8 billion, an increase of $1.3 billion or 3.2% in real terms over the latest estimated spending for 2000-01.

* Recurrent spending on social welfare will amount to $30.2 billion, an increase of $2.7 billion or 9.3% in real terms over the latest estimated spending for 2000-01.

* Recurrent spending on security will amount to $25.3 billion, an increase of $1 billion or 3.1% in real terms over the latest estimated spending in 2000-01.

* Recurrent spending on employment, training and retraining will amount to $2.2 billion, an increase of $0.8 billion or more than 55% in real terms over the latest estimated spending for 2000-01. The additional resources will provide more training services to our workforce, enabling it to acquire new or enhanced vocational skills in an increasingly knowledge-based economy.

Capital Expenditure

* Expenditure from the Capital Works Reserve Fund makes up the bulk of capital expenditure. Expenditure from this Fund in 2001-02 will amount to $31.4 billion, an increase of $2.5 billion or by 8.6% in real terms over the latest estimated spending in 2000-01.

* Other capital expenditure includes spending $9.4 billion from the Loan Fund, $0.9 billion from the Innovation and Technology Fund, and $8 billion for plant, equipment, etc.

Major Additional Services and New and Improved Services in 2001-02

* Education

- Upgrading 145 teaching posts in primary schools to provide leadership in developing the English curriculum and in the teaching of English.

- Implementing curriculum reform.

- Implementing various Education Reform initiatives, including providing more training in early childhood education; strengthening the support for students with special educational needs; introducing the Composite Furniture and Equipment Grant for aided schools with effect from the 2001/02 school year; developing the Basic Competency Assessments; and implementing the District Teacher Network Scheme.

- Operating 46 more primary schools on whole-day basis.

- Upgrading a further 1,640 teaching posts in primary schools to graduate status.

- About 100 additional teaching posts in secondary schools to enhance the use of Chinese as the medium of instruction.

- About 170 additional teaching posts in primary schools to co-ordinate library services and support the Extensive Reading Schemes.

- Providing training in connection with proficiency assessment.

- Additional schools joining the Direct Subsidy Scheme.

* Health

- 145 additional hospital beds.

- 40 additional day hospital places.

- Introducing family medicine practice in 5 General Out-patient Clinics.

- 3 additional Community Psychiatric Teams.

- 2,500 patients provided with new psychiatric drugs.

- Assessing 1,400 young persons to identify psychotic problems for early treatment.

- A new Public Health Laboratory Centre in Shek Kip Mei.

* Social Welfare

- An additional 2,541 residential places, 7 social centres, 3 multi-service centres, 60 day care centre places and enhanced home and community care services for elders.

- An additional 540 residential places, 100 day places, 500 sheltered workshop places and 180 supported employment places for the disabled.

- An additional 500 day nursery places.

- An additional team for the community support service scheme and expansion of 8 integrated teams for young night drifters.

- Additional care assistants and programme assistants in various services units for elders, rehabilitation and youth.

- 2 additional child custody workers, 20 child protection workers and 2 clinical psychologists to assist victims of sexual and domestic violence and people with marital problems.

- 6 additional medical social workers at new medical facilities.

- 4 additional school social workers for new schools.

- Meeting continued growth in social security payments.

* Security

- 138 additional police officers to strengthen operational front-line capabilities and traffic enforcement in new towns and new infrastructure.

- 104 additional staff in Fire Services Department for new fire stations and additional ambulances.

- 5 additional staff in Fire Services Department for implementation of the Railway Development Strategy.

- 11 additional staff in ICAC for establishment of a Quick Response Team.

- 26 additional staff in Customs and Excise Department for customs facilities at Container Terminal No. 9.

- 54 additional staff in Correctional Services Department for the commissioning of the redeveloped Tai Lam Correctional Institution.

- 117 additional staff in Immigration Department to strengthen manpower at Lo Wu Control Point.

- 45 additional staff in Immigration Department and additional briefing-out provision for Department of Justice to expedite the handling of judicial review cases arising from right of abode litigation.

Major Capital Projects to Begin in 2001-02

* Infrastructure	                                  ($37,035million)
-South East Kowloon development
-Wan Chai development phase II, engineering works
-Site formation, construction of associated infrastructure and 
provision of government, institution and community facilities
for Hong Kong Disneyland on Lantau Island
-Route 9 between Cheung Sha Wan and Sha Tin
-Tsuen Wan Road upgrading
-Reconstruction and improvement of Tuen Mun Road
-Replacement and rehabilitation of water mains, stage I

* Environment and Food	                               ($4,833million)
-Regulation of Shenzhen River, stage III
-Drainage improvement in Northern Hong Kong Island
-Drainage improvement in Tsuen Wan, Kwai Chung and Tsing Yi
-West Kowloon drainage improvement
-Central, Western, and Wan Chai West sewerage, stage II works

* Education	                                        ($4,507million)
-Construction of additional primary and secondary schools
-School Improvement Programme
-Construction of buildings and hostels in universities

* Economic	                                        ($1,392million)
-Science Park at Pak Shek Kok-phase 1 remaining works

* Security	                                          ($944million)
-West Kowloon Magistracy Building

Enhanced Productivity Programme (EPP)
* EPP savings in 2001-02 amount to $2.2 billion, all of which have been redeployed to provide new and improved services to meet the community's needs.

* The Government is on schedule to achieving the target of 5% EPP savings by 2002-03.

Land Revenue

* Revenue from land in 2001-02 is estimated at $27.6 billion, a decrease of $1.5 billion compared with the latest land revenue estimate for 2000-01.

* The estimate for land revenue takes into account the number, size and location of sites forecast to be disposed of.

* The latest land revenue estimate for 2000-01 is $29.1 billion, or $13.3 billion less than the original estimate of $42.4 billion. The reduction is mainly due to the lower-than-expected interest by developers on sites included on the Application List.

End/Friday, March 2, 2001

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