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The Government announced today (September 30) its financial results for the five months ended August 31, 2004.

Expenditure for the period April to August 2004 amounted to $99.2 billion and revenue to $83.3 billion, resulting in a deficit of $15.9 billion. The revenue for the period, and thus the deficit, have taken account of the $6 billion Toll Revenue Bond and $20 billion Government bonds and notes issued in May and July 2004 respectively.

A government spokesman said that a deficit in the initial months of a financial year was not unusual as many types of revenue including taxes were mostly received towards the end of the year.

The fiscal reserves stood at $259.4 billion at August 31, 2004.

More detailed figures are shown in Tables 1 and 2.

TABLE 1.  CONSOLIDATED ACCOUNT




                                         Year to date


                     Month ended        April 1, 2004 to


                     August 31, 2004    August 31, 2004


                     ---------------    ----------------


                       HK$ million        HK$ million


Revenue                     9,849.5           83,255.0


Expenditure              (20,498.2)         (99,193.6)


                     ----------------    -------------


Surplus/(Deficit)       (10,648.7)         (15,938.6)


                     ----------------    -------------


Financing


 Domestic


  Banking Sector (Note 1) 10,645.0         14,781.1


  Non-Banking Sector             3.7          1,157.5


 External                           -                -


                     ----------------    ----------------


Total                        10,648.7          15,938.6


                       ----------------    -------------

Government Debts as at August 31, 2004 (Note 2)

HK$25,890.1 million

Debts Guaranteed by Government as at August 31, 2004 (Note 3)

HK$4,487.8 million

Notes:

1. Includes transactions with the Exchange Fund and resident banks.

2. The total Government debts of $25,890.1 million as at August 31, 2004 comprises :

(i) Toll Revenue Bond of $5,890.1 million to be repaid to Hong Kong Link 2004 Limited by the net toll revenue receivable of Government tolled tunnels and bridges. Out of the $5,890.1 million, $450 million will mature within the next 12 months and the rest will mature by May 2016 but may be fully repaid before then; and

(ii) Retail bonds and institutional notes totalling $20 billion (including US$1.25 billion denominated in United States dollars). The maturity dates of these bonds and notes fall within the period July 2006 to July 2019.

3. Guarantees provided under the Special Finance Scheme for Small and Medium Enterprises, the Self-employment Business Start-up Assistance Scheme, the SME Loan Guarantee Scheme, the Film Guarantee Fund and the Loan Guarantee Scheme for Severe Acute Respiratory Syndrome Impacted Industries.

TABLE 2.     FISCAL RESERVES




                                        Year to date


                      Month ended       April 1, 2004 to


                      August 31, 2004   August 31, 2004


                      ---------------   ----------------


                        HK$ million        HK$ million


Fiscal Reserves at


start of period         270,052.8          275,342.7


Add: Consolidated


      Surplus/(Deficit) (10,648.7)        (15,938.6)


                         ------------     --------------


Fiscal Reserves at


end of period            259,404.1          259,404.1


                         ------------     --------------

Ends/Thursday, September 30, 2004

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