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2006-07 Outturn
9.
The
Government's financial position
has improved markedly as a result of our strong
economic recovery.
10. I estimate that
operating expenditure for 2006?7 will be $195.7 billion, a moderate increase of 1.7 per cent
over the 2005?6 figure. That government operating expenditure has
been contained within $200 billion for three years
in a row is no mean accomplishment.
11. Due to government
departments' efforts in
implementing structural reorganisation and
streamlining procedures, we will be able to reduce
the establishment of the civil service to
approximately 161 800 by the end of March 2007,
and so attain our target. My sincere appreciation goes to our clean,
efficient and dedicated civil service for making
strenuous efforts to rein in expenditure,
implementing a wide range of policies and providing
quality public services to the community, while
coping with greatly-increased pressure from various
austerity measures.
12. Government revenue is
far higher than expected, due to the strengthening
economy, increased corporate profits and salaries,
the buoyant stock market and a stable property
market. For
2006?7, I am forecasting surpluses of $38.6
billion in the Operating Account and $55.1 billion
in the Consolidated Account.
13. The variances between
the revised and original estimates are essentially
due to our economy's better-than-expected
performance over the past 12 months. Last year, our GDP grew by 6.8 per cent,
significantly higher than the 4 to 5 per cent
forecast by the market and the Government earlier in
the year. This
has meant that investment income and revenue from
land premiums, stamp duty, profits tax and salaries
tax alone are about $31 billion higher than the
original estimates. Moreover, the preparation of the estimates is
a mammoth exercise. Given the fact that government revenue and
expenditure total about $520 billion a year,
involving more than 200 revenue items and a large
number of expenditure items under some 80
expenditure heads and eight purpose-specific funds,
it is understandable that some variances between the
estimates and the actual figures will occur as a
result of different factors.
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