Budget Speech by the Financial Secretary (10)
Estimates for 2017-18
161. The major new policy initiatives announced by the Chief Executive in the Policy Address involve an operating expenditure of $25 billion and capital expenditure of $61 billion. I will ensure that financial resources are adequate to fully support the launch of these initiatives.
162. Total government revenue for 2017-18 is estimated to be $507.7 billion, of which earnings and profits tax is estimated at $208.9 billion. Land revenue is estimated to be $101 billion, which is at a relatively high level, since the Government plans to release several valuable commercial sites in the urban area next year.
163. The overall expenditure of the Government for 2017-18 is estimated to be $491.4 billion, representing an increase of 5.3 per cent compared with the revised estimate for 2016-17. Operating expenditure for 2017-18 is estimated to be $384.2 billion, representing a year-on-year increase of 8.5 per cent or $30.1 billion. Recurrent expenditure, which accounts for over 90 per cent of operating expenditure, will reach $371 billion, reflecting a year-on-year increase of 7.4 per cent or $25.6 billion. In 2017-18, the estimated recurrent expenditure on education, social welfare and healthcare accounts for about 60 per cent of government recurrent expenditure, exceeding $210 billion in total. Recurrent expenditure in these three areas recorded a cumulative increase reaching 43 per cent in these five years. I would like to set out the major expenditure items in the ensuing paragraphs.
164. In 2017-18, recurrent expenditure on education is estimated to be $78.6 billion, representing an increase of $3.1 billion by year and accounting for 21 per cent of government recurrent expenditure. The major new initiatives include–
(a) implementing the free quality kindergarten education policy from the 2017/18 school year and the recurrent expenditure on pre-primary education will increase to about $6.7 billion; and
(b) regularising the Study Subsidy Scheme for Designated Professions/Sectors from the 2018/19 academic year and increasing the number of subsidised places to about 3 000 per cohort, involving about $850 million per year.
165. Regarding non-recurrent expenditure on education, we will launch the seventh round of Matching Grant Scheme in 2017-18 with a commitment of up to $500 million for eligible self-financing local degree-awarding institutions to apply, thereby helping these institutions recruit additional staff, retain talent, upgrade their facilities, enhance learning and teaching, and organise student-oriented activities. We will inject an additional $1.5 billion into the CEF and explore various measures for its enhancement, so as to cater for people with diverse education needs.
166. Besides, as mentioned in paragraph 68, I have earmarked $700 million from the surplus for this financial year to support student learning and professional development of teachers. In addition, we attach importance to the student's learning environment. Hence, we will increase the allocation for regular school repairs by nine per cent to $1.2 billion. Recognising their special designs, we will also earmark sufficient resources for retrofitting 26 "matchbox-style school premises".
167. In 2017-18, recurrent expenditure on social welfare is estimated to be $73.3 billion, representing an increase of $9.5 billion by year and accounting for 20 per cent of government recurrent expenditure. The major new initiatives include–
(a) allocating additional funding of $253 million to strengthen elderly care by increasing the number of subsidised residential care places and day care places for the elderly and improving the services of the existing contract homes, involving a total of 758 places; as well as increasing funding for the Infirmary Care Supplement and the Dementia Supplement;
(b) exempting once again, on a one-off basis for a one-year period, eligible elderly persons already residing in Guangdong from the requirement of having resided in Hong Kong continuously for at least one year immediately before the date of application under the Guangdong Scheme; and introducing, with reference to the design of the Guangdong Scheme, the Fujian Scheme to provide monthly OAA for eligible elderly persons who choose to reside in Fujian. Expenditure for the first year upon full implementation of both measures will amount to about $174 million;
(c) adding a higher tier of assistance under the OALA and relaxing the asset limits for the OALA. Expenditure for the first year upon full implementation of both measures will amount to about $6.53 billion;
(d) on supporting persons with disabilities, allocating additional funding of $176 million to provide a total of 898 additional places covering residential care, day training and vocational rehabilitation as well as pre-school rehabilitation services; providing 80 additional day care service places in the district support centres for persons with disabilities and enhancing their outreaching services; and strengthening the manpower of Integrated Community Centres for Mental Wellness as well as regularising the Pilot Project on Peer Support Service in Community Psychiatric Service Units;
(e) allocating an additional $582 million to support children with special needs and their parents by, among others, regularising the pilot scheme on On-site Pre-school Rehabilitation Services as well as offering about 7 000 places in phases; waiving the service fees of special child care centres; and providing a non-means-tested training subsidy for children on the waiting list of these centres; and
(f) allocating an additional $145 million for day/residential child care service units and pre-school rehabilitation services for enhancing remuneration for qualified staff, so as to retain and attract such staff; and allocating an additional $71 million for increasing the level of various foster care allowances, providing 240 additional foster care places in phases as well as recruiting more foster parents.
168. We will inject a funding of $100 million for the Enhancing Employment of People with Disabilities through Small Enterprise Project to create more employment opportunities for persons with disabilities. As mentioned in paragraph 68, I will earmark $30 billion to strengthen elderly services and rehabilitation services for persons with disabilities.
169. In 2017-18, recurrent expenditure on healthcare is estimated to be $61.9 billion, representing an increase of $3.2 billion by year and accounting for 17 per cent of government recurrent expenditure. The major new initiatives include–
(a) recruiting more healthcare staff, enhancing service and improving waiting time through such initiatives as increasing the number of hospital beds, and the quota for general out-patient consultation, augmenting the service capacity of specialist out-patient clinics and Accident and Emergency Departments, strengthening psychiatric healthcare manpower, and expanding clinical pharmacy, drug reconciliation and consultation services;
(b) enhancing healthcare services for the elderly, including setting up geriatric fragility fracture co-ordination services in designated acute hospitals and strengthening physiotherapy service;
(c) further enhancing the services provided by the Community Geriatric Assessment Teams for terminally-ill patients living in residential care homes for the elderly;
(d) extending the fee waiver for public hospital and clinic services to cover older OALA recipients with more financial needs; and
(e) lowering the eligibility age for the Elderly Health Care Vouchers from 70 to 65.
170. Capital expenditure is forecast to be $107.2 billion for 2017-18, including $86.8 billion for capital works. The Government will continue to allocate substantial resources to implement public works projects that are closely related to people's livelihood.
171. Regarding transportation, a number of major infrastructure projects are at their construction peaks. These projects are the Guangzhou-Shenzhen-Hong Kong Express Rail Link (Hong Kong Section), the Shatin to Central Link, the Central-Wan Chai Bypass and the Island Eastern Corridor Link, the HZMB local projects (i.e. the Hong Kong Boundary Crossing Facilities and Hong Kong Link Road) and the Tuen Mun-Chek Lap Kok Link, etc. In parallel, the Government is pressing ahead with a host of cross-boundary and domestic projects, which include the Liantang/Heung Yuen Wai Boundary Control Point, the Tseung Kwan O-Lam Tin Tunnel and the Central Kowloon Route, etc. We aim to expand and improve our railway and road networks and facilitate daily travel with a view to enhancing the efficiency and international competitiveness of our city. As for medium- to long-term land supply, other than the potential railway property development projects under planning such as the development at the Siu Ho Wan Depot site, we will continue to take forward the Tung Chung new town extension, as well as the implementation plans for new development areas at Kwu Tung North, Fanling North, Hung Shui Kiu and Yuen Long South, etc.
172. To enhance healthcare facilities and services in the face of an ageing population, the Government announced the ten-year hospital development plan of $200 billion, under which a new major acute general hospital will be built in the Kai Tak Development Area to provide 2 400 beds and the first neuroscience centre in Hong Kong. The plan also covers the redevelopment or expansion of over ten hospitals including Queen Mary Hospital, Kwong Wah Hospital, United Christian Hospital, Prince of Wales Hospital, Kwai Chung Hospital and Grantham Hospital, etc., with a view to upgrading the existing healthcare facilities for enhanced service quality and capacity.
173. As for sports development, apart from the sum of $20 billion allocated for developing sports and recreation facilities in different districts, the Government will seek funding approval of about $31.9 billion from the Finance Committee for the construction of the Kai Tak Sports Park. The project mainly provides a 50 000-seat main stadium, a public sports ground and a large indoor sports centre.
174. Given that a number of projects are now at their construction peaks, and that a series of infrastructure projects will commence soon, capital works expenditure is expected to remain at a relatively high level in the next few years. I appeal to Members to stop frustrating deliberations on funding proposals by filibustering tactics, so that livelihood projects can commence as early as possible for the benefit of the public. Besides, we ought to minimise drastic fluctuations in the volume of construction to avoid affecting the jobs and livelihood of the construction sector and causing spillover to other trades, which could ultimately rock the economy.
175. In 2017-18, the civil service establishment is expected to expand by 3 378 posts to 181 705, representing a year-on-year increase of about 1.9 per cent. This manpower increase is to allow government departments to implement new policies and improve existing services.
176. Taking all these into account, I forecast a surplus of $16.3 billion in the Consolidated Account in the coming year. Fiscal reserves are estimated to be $952 billion by the end of March 2018, representing 37 per cent of GDP.
(To be continued.)
Ends/Wednesday, February 22, 2017
Issued at HKT 12:50
Issued at HKT 12:50
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