Following is the transcript of the English portion of the question and answer session given by the Secretary for the Treasury, Miss Denise Yue, today (March 2):
Question: I was just wondering, as the total expenditure right now, is lower than estimated, so are you trying to lower the deficit? Are you now happy with the numbers?
S for Tsy: From a financial control point of view, I can assure you, what we've budgeted for, we want controlling officers to be able to spend, unless the under-expenditure is because of price reduction or unless the under-expenditure is the result of efforts by controlling officers to enhance efficiency. Otherwise, if we have budgeted for expenditure, we would like that expenditure to be spent, to be realised. But forecasts after all, estimates after all, is an art and not an exact science.
Twelve months ago when we prepared the Budget for the fiscal year 2000-01 for example, we estimated expenditure on CSSA, i.e. Comprehensive Social Security Assistance Scheme, would be X-billion dollars. Now, based on actual expenditure over the last 10 months, we have reason to believe that this X-billion will not be needed, so we have adjusted it to Y-billion. Now, that is one of the reasons explaining the under-expenditure. It is not because we deliberately wish to reduce the deficit.
A second reason for under-expenditure is because for capital works projects, some of the projects have proceeded slower than we have anticipated originally, partly because we need a longer time to go through all the statutory requirements such as Environmental Impact Assessment, such as Objection for Resumption, or Objection for Reclamation Purpose. And sometimes it is because of views expressed by the concerned local people and members of our legislature that we have revised or refined the scope of a public works project. That is also another reason why some projects have proceeded slower than we anticipated, and of course that would mean less cash flow expenditure for the year 2000-01 than we had originally anticipated. I would like to say categorically - categorically - that we have not deliberately held back expenditure in order to reduce the budgeted deficit.
Question: Obviously, I am not going to ask you what the Budget deficit/surplus is going to be on Wednesday, but what I would like to ask you is that considering that a prediction was made that the deficit could be $10 billion, considering that the end of January deficit figure is $2.2 billion, do you now envisage that there could be a deficit that is substantially lower than your $10 billion estimate?
S for Tsy: You have very kindly acknowledged that I am not in a position to give you the latest forecast outturn for the fiscal year 2000-01. You have kindly acknowledged that this figure will be disclosed by the Financial Secretary. I thank you for this understanding.
Your question related to the (fact that) the government financial position as at the end of January this year was a deficit of $2 billion, so is it likely that the Budget deficit for the current fiscal year will be greater than $2 billion. Let me just say three or four things.
First of all, the deficit figure of $2 billion has already included the $10 billion proceeds from the privatization of MTR. Secondly, it is a fact, which all of you know, (that) the likely income from revenue for the fiscal year 2000 will be less, quite substantially less than what we estimated last March. The third reason, which all of you also know, (is that) the return from our fiscal reserves for the fiscal year 2000 is also going to be quite substantially lower than the year before, largely because the financial markets were particularly volatile in the year 2000, both in the local securities market and in the international bond market. The fourth reason: in this month we will be making a few one-off substantial expenditure items. The most prominent is, later this month we will be injecting $8 billion into the Kowloon-Canton Railway to assist in the construction of the Ma On Shan Extension Project and the Tsim Sha Tsui Extension Project. So all these have not been fully reflected in the deficit figure of $2 billion for the month ended January 2001.
Question: Could you please clarify the precise figures you are referring to when you say there has been a $16.2 billion cut? Which numbers are you talking about, government spending or total public spending, and what are you comparing it with?
S for Tsy: First of all, I would disagree with you in the choice of your word "cut". We have not cut expenditure. The figure refers to comparing the original estimated expenditure for the fiscal year 2000-01 with the latest forecast expenditure for that fiscal year. And the reduction refers to government expenditure, not public expenditure.
End/Friday, March 2, 2001