APPENDICES
 
 
A.  Medium Range Forecast 2000-2001 to 2004-2005

    Forecasting Government's expenditure and revenue in the period up to 2004-2005 and setting these forecasts in a historical context.

B.  Trends in public expenditure 1996-1997 to 2001-2002

    Showing the allocation of resources between policy area groups.

C.  Growth in recurrent public expenditure in 2001-2002 in major policy
      area groups

    Listing major improvements in services in 2001-2002.

D.  Major capital projects to begin in 2001-2002

    Listing major capital projects to begin in 2001-2002.

E.  Glossary of Terms

 
  APPENDIX A
 
  MEDIUM RANGE FORECAST 

2000-2001 TO 2004-2005
 


 
 

INTRODUCTION

       The Medium Range Forecast (MRF) is a projection of expenditure and revenue for the forecast period based on the forecasting assumptions and budgetary criteria outlined in Section I of this Appendix.

2    The MRF is presented in three sections:

      (I)  Forecasting assumptions and budgetary criteria.

     (II)  The MRF for 2000-2001 to 2004-2005.

    (III)  Commentary on the MRF in relation to budgetary criteria.

3    An estimate of Government's contingent liabilities at 31 March 2001 and 31 March 2002 respectively is provided in Section IV of this Appendix as supplementary information to the MRF.

SECTION I - FORECASTING ASSUMPTIONS AND BUDGETARY CRITERIA

4    A number of computer based models are used to derive the MRF. These models reflect a wide range of assumptions about the factors determining each of the components of Government's revenue and expenditure. Some are economic in nature (the general economic assumptions) while others deal with specific areas of Government's activity (the detailed assumptions). These are supported by studies of historical and anticipated trends.

General Economic Assumptions

Growth in Gross Domestic Product (GDP)

5    There is a clear link between many of Government's major revenue sources and economic growth. For planning purposes the medium range assumption as to annual GDP growth for the current MRF has been set at 4% in real terms.

Inflation

6    Over the forecast period the average year on year inflation is assumed to be 2.5%. It is emphasised that this is a trend assumption related to the GDP deflator.

Methodology

7    In arriving at the yearly forecasts, account is taken of short-term fluctuations from the trend forecasts.

Detailed Assumptions

8    A wide range of detailed assumptions relating to developing expenditure and revenue patterns over the forecast period are taken into account. These include:

  • estimated cash flow of capital projects.
  • forecast completion dates of these capital projects and their related recurrent consequences in terms of staffing and running costs.
  • estimated cash flow arising from new commitments resulting from policy initiatives.
  • the expected pattern of demand for individual services.
  • the trend in yield from individual revenue sources.
  • new revenue measures in the 2001 Budget.

Budgetary Criteria

9    In addition to the above forecasting assumptions there are a number of criteria against which the results of forecasts are tested for overall acceptability in terms of budgetary policy. Any significant breach of these parameters results in a review of the underlying programmes and adjustments where necessary and appropriate.

10    The following are the more important budgetary criteria:

  • Total cash flow surplus/deficit

The Government aims to maintain adequate reserves in the long term.

  • Total expenditure growth

The general principle is that, over time, expenditure growth should not exceed the growth of the economy.

  • Capital expenditure growth

By its nature some fluctuations in the level of capital expenditure are to be expected. However, over a period the aim is to contain capital expenditure growth within overall expenditure guidelines.

  • Revenue policy

The projections reflect the revenue measures introduced in the 2001 Budget. Account is taken of the need to maintain over time the real yield from fees and charges, fixed duties etc. and to review periodically the various tax thresholds in the light of inflation.

SECTION II - THE MRF FOR 2000-2001 TO 2004-2005

11    The current MRF is summarised in the following three tables which indicate the forecast operating position, capital cash flow and consolidated reserves (Note a).

Operating Statement (General Revenue Account) Table 1
　 Revised Estimate Forecast
2000-2001 2001-2002 2002-2003 2003-2004 2004-2005
$m $m $m $m $m
Revenue (Note b) 173,790 196,990 215,630 232,070 249,750
Less: Expenditure (Note c) 190,950 210,930 222,880 236,520 252,850
Operating surplus/(deficit) for the year (Note d) (17,160) (13,940) (7,250)

(4,450)

(3,100)
Capital Financing Statement (The Funds) Table 2
　 Revised Estimate Forecast
2000-2001 2001-2002 2002-2003 2003-2004 2004-2005
$m $m $m $m $m
Opening balances of the Funds 64,330 57,700 56,700 60,180 61,740
Add   : Revenue (Note e) 39,010 39,710 47,110 54,710 64,150
          : Transfers from/(to) General Revenue Account (Note f) (2,380) 3,030 3,000 3,000 (12,000)
Less   : Expenditure on capital projects (Note g) 28,890 31,430 31,610 36,140 38,590
          : Loans and investments
(Notes h and i) 		13,950 11,420 12,860 17,750 12,250
          : Aid for disaster relief (Note j) 20 - - - -
          : Expenditure for innovation and technology (Note k) 400 890 2,160 2,260 0
Closing balances of the Funds 57,700 56,700 60,180 61,740 63,050
Consolidated Reserves Table 3
　 Revised Estimate Forecast
2000-2001 2001-2002 2002-2003 2003-2004 2004-2005
$m $m $m $m $m
General Revenue Account 　 　 　 　 　

    Opening balance

 379,930 375,210 373,240 362,990 355,540

    Operating surplus/(deficit) (per Table 1)

 (17,160) (13,940) (7,250) (4,450) (3,100)

    MTRC privatisation proceeds
    (Note b)

 10,060 15,000 0 0 0

    Transfers from/(to) the Funds (per Table 2) (Note f)

 2,380 (3,030) (3,000) (3,000) 12,000

    Closing balance

 375,210 373,240 362,990 355,540 364,440
The Funds-closing balances (per Table 2) 57,700 56,700 60,180 61,740 63,050
Fiscal Reserves at 31 March(Note l) 432,910 429,940 423,170 417,280 427,490

Notes on the Medium Range Forecast

(a) Accounting policies

    1. The Medium Range Forecast, like Government's Accounts, is prepared on a cash basis and reflects forecast receipts and payments, whether or not they relate to recurrent or capital transactions.
    2. The Medium Range Forecast includes the General Revenue Account and the Funds (the Capital Works Reserve Fund, the Loan Fund, the Capital Investment Fund, the Disaster Relief Fund, the Civil Service Pension Reserve Fund and the Innovation and Technology Fund). For the purpose of the Medium Range Forecast, the Land Fund is consolidated with the General Revenue Account.

(b) General Revenue Account - Revenue

       This comprises all receipts to be credited to any of the following revenue heads, namely -

      Duties
      General Rates
      Internal Revenue
      Motor Vehicle Taxes
      Fines, Forfeitures and Penalties
      Royalties and Concessions
      Properties and Investments
      Loans, Reimbursements, Contributions and Other Receipts (excluding transfers from Funds)
      Utilities
      Fees and Charges

      For the purpose of the Medium Range Forecast:

  • the investment earnings of the Land Fund are consolidated with the revenue of the General Revenue Account; and
  • exceptional receipts of $10 billion in 2000-2001 and $15 billion in 2001-2002 arising from the MTR Corporation Limited (MTR) Privatisation Share Offer, though they are to be credited to the General Revenue Account, are shown separately in Table 3.

(c) General Revenue Account - Expenditure

        This comprises all expenditure to be charged to the General Revenue Account in accordance with the Appropriation Ordinance, with the exception of the transfers to Funds. It includes the day to day operational expenses of government departments together with minor capital purchases of a routine nature.

(d) Operating surplus/deficit for the year

        The deficits in 2000-2001 to 2003-2004 are after provision for compensatory payments and commuted pension gratuity payments under the Voluntary Retirement Scheme and the Voluntary Departure Scheme introduced in 2000-2001. These payments are one-off in nature and forecast to amount to $1.3 billion in 2000-2001, $5.7 billion in 2001-2002, $2.6 billion in 2002-2003 and $0.6 billion in 2003-2004.

(e) Funds - Revenue

          This comprises all revenue receivable by the Funds except the transfers from General Revenue Account. It includes -

      Land premia
      Loan repayments received
      Recovery from MTR Corp Ltd
      Recoveries from Trading Funds
      Investment earnings and dividends
      Donations towards capital projects

            The breakdown of revenue to the various Funds is -

2000-2001 2001-2002 2002-2003 2003-2004 2004-2005
$m $m $m $m $m
Capital Works Reserve Fund 31,600 30,310 38,750 45,820 55,310
Capital Investment Fund 2,930 2,770 2,860 2,840 2,820
Civil Service Pension Reserve Fund 600 1,000 1,030 1,060 1,090
Loan Fund 3,590 5,230 4,140 4,810 4,840
Innovation and Technology Fund
 		 290
_______		 400
_______		 330
_______		 180
_______		 90
_______
Total
 		 39,010
_______		 39,710
_______		 47,110
_______		 54,710
_______		 64,150
_______

(f) Transfers between General Revenue Account and the Funds

          The transfers between General Revenue Account and the Funds are assessed with regard to the commitments of the Funds and their forecast cash flow requirements. The breakdown of the transfers for 2000-2001 and 2001-2002 is -

2000-2001

2001-2002

$m       

 $m      
General Revenue Account 2,380  (3,030)
Capital Works Reserve Fund (6,000) 0  
Loan Fund 0 3,000 
Capital Investment Fund 3,600 0 
Disaster Relief Fund 20 30  
Civil Service Pension Reserve Fund

0 

 0  
Innovation and Technology Fund 0 0 

(g) Expenditure on capital projects

          This comprises expenditure chargeable to the Capital Works Reserve Fund in respect of the Public Works Programme, land acquisition, capital subventions, major systems and equipment and computerisation.

(h) Loans

          These comprise loans made from the Loan Fund, including loans to schools, teachers, students, housing loans, and loans under the special finance scheme for small and medium enterprises.

          The forecast of payments from the Loan Fund is -

2000-2001 2001-2002 2002-2003 2003-2004 2004-2005
$m $m $m $m $m
5,840 9,420 10,200 7,840 6,030

(i) Investments

          These comprise, in the main, advances and equity investments made from the Capital Investment Fund to Trading Funds and statutory bodies.

          The forecast of payments from the Capital Investment Fund is -

2000-2001 2001-2002 2002-2003 2003-2004 2004-2005
$m $m $m $m $m
8,110 2,000 2,660 9,910 6,220

(j) Aid for disaster relief

          This is actual expenditure made from the Disaster Relief Fund for providing relief to disasters that occur outside Hong Kong. Because of the unpredictable nature of disasters, no estimate of future expenditure is made for the forecast period.

(k) Expenditure for Innovation and Technology

          This comprises expenditure chargeable to the Innovation and Technology Fund to finance projects to help promote innovation and technology upgrading in manufacturing and service industries.

(l) Fiscal reserves

          The fiscal reserves represent the accumulated balances of the General Revenue Account (including the Land Fund) and the Funds. The movement in the fiscal reserves from one year to the next year represents the estimated surplus/deficit for the year.

　

SECTION III - COMMENTARY ON THE MRF

Expenditure Growth

12    To demonstrate that expenditure growth, over time, does not exceed the trend growth rate in the economy, Government's spending plans should be compared with the budgetary guidelines (Diagrams 1 and 2).

　

# The guidelines in 2000-2001 have been restructured to allow for real growth of 2.5% in recurrent expenditure and 3% in capital works expenditure in 2000-2001 over the original estimate for 1999-2000 and to take into account the impact of the reorganisation of municipal services.

Public Expenditure in the Context of the Economy

13    For monitoring purposes, the Government's own expenditure is consolidated with the expenditure of some other public bodies such as the Housing Authority in order to compare total public expenditure with the size of the economy.

14    The results of this comparison are set out in Table 4 and the historical and forecast relationship between GDP and public expenditure is illustrated in Diagram 3. A comparison of cumulative growth in public expenditure with cumulative growth in GDP since the introduction of the MRF in 1986-87 is shown in Diagram 4. GDP figures quoted in Table 4 and used to derive Diagrams 3 and 4 are based on trend forecasts for 2001–2002 onwards.

Public Expenditure in the Context of the Economy (Note 1) Table 4
　 Revised Estimate Forecast
2000-2001 2001-2002 2002-2003 2003-2004 2004-2005
$m $m $m $m $m
Operating expenditure 188,800 207,830 220,040 233,470 249,570
Capital expenditure 37,300 44,840 46,810 49,290 47,900
Total government expenditure 226,100 252,670 266,850 282,760 297,470
Add: Other public bodies 52,290 38,000 35,700 38,600 36,920
Total public expenditure 278,390 290,670 302,550 321,360 334,390
Gross Domestic Product (calendar year)
(Note 2) 		1,271,700 1,355,630 1,445,100 1,540,480 1,642,150
Growth in GDP 　 　 　 　 　

    Money terms

 3.1% 6.6% 6.6% 6.6% 6.6%

    Real terms

 10.5% 4.0% 4.0% 4.0% 4.0%
Growth in public expenditure 　 　 　 　 　

    Money terms

 +3.3% +4.4% +4.1% +6.2% +4.1%

    Real terms

 +3.8% +3.5% +1.5% +3.7% +1.4%
Public expenditure as a percentage of GDP
(at current prices)(Note 3) 		21.9% 21.4% 20.9% 20.9% 20.4%
Note 1 Public expenditure comprises government expenditure (i.e. all expenditure charged to the General Revenue Account and financed by the Government's statutory Funds excluding Capital Investment Fund), and expenditure by the Trading Funds, the Housing Authority and the Lotteries Fund. Expenditure by institutions in the private or quasi-private sector is included to the extent of their subventions. But not included is expenditure by those organisations, including statutory organisations, in which the Government has only an equity position, such as the Airport Authority, the MTR Corp Ltd and the Kowloon-Canton Railway Corporation. Similarly, advances and equity investments from the Capital Investment Fund are excluded as they do not reflect the actual consumption of resources by the Government.
Note 2 For years beyond the current year, the GDP figures are based on trend assumptions.
Note 3 Caution should be exercised in interpreting these percentages as the public expenditure is estimated on a fiscal year basis while the GDP is estimated on a calendar year basis.

15    Table 5 shows the sum to be appropriated in the 2001-2002 Budget analysed between operating and capital expenditure and after including expenditure from the various Funds and other public bodies. It also shows the derivation of public expenditure for 2001-2002 given in Table 4.

16    Table 5 also illustrates the effect of the Budget revenue measures on the overall surplus/deficit position for 2001-2002.

Relationship between Government Expenditure
and Public Expenditure in 2001-2002 		Table 5
Components of expenditure and revenue Appropriation Government expenditure and revenue Public Expenditure
Operating Capital Total
　 $m $m $m $m $m
Expenditure
General Revenue Account:		 　 　 　 　 　

    Recurrent account

 202,985 202,985   -   202,985   202,985      

    Capital account

 　 　 　 　 　

      Plant, equipment and works

 1,695 -   1,695  1,695   1,695      

      Other non-recurrent

 4,845 4,845   -   4,845   4,845    

      Subventions

 1,405 -   1,405   1,405   1,405     
　 210,930 207,830(1) 3,100   210,930   210,930     

      Transfers to Funds

 3,025 -    -   -   -      
Capital Works Reserve Fund -   -    31,430   31,430   31,430      
Load Fund -   -    9,420   9,420   9,420      
Innovation and Technology Fund -   -    890  890  890     
Trading funds -   -    -   -   3,375      
Lotteries Fund -   -    -   -   1,010      
Housing Authority -   -    -   -   33,610      
　 213,955   207,830    44,840   252,670   290,665      
Revenue (before Budget revenue measures) 　 　 　 　 　
General Revenue Account: 　 　 　 　 　

    Taxation

 　 131,900    1,260   133,160   　

    Other revenue

 　 38,380    4,460   42,840   　
　 　 170,280    5,720   176,000   　
MTR Privatisation proceeds 　 -    15,000  15,000  　
Land Fund (2) 　 21,020    -    21,020  　
　 　 191,300     20,720  212,020  　
　 　 　 　 　 　
　 　 　 　 　 　
Capital Works Reserve Fund 　 -   30,310   30,310   　
Capital Investment Fund 　 -   2,770   2,770   　
Civil Service Pension Reserve Fund 　 -   1,000   1,000   　
Disaster Relief Fund 　 -   -   -   　
Load Fund 　 -   5,230   5,230   　
Innovation and Technology Fund 　 -   400  400   　
　 　 191,300     60,430   251,730   　
Cash surplus/(deficit) before Budget revenue measures 　 (16,530)    15,590    (940)  　
Less: Effect of Budget revenue measures 　 (30)     -   (30)  　
Cash surplus/(deficit) after Budget revenue measures 　 (16,560)    15,590   (970)  　
Less: Advances and equity investments from the Capital Investment Fund(3) 　 -   (2,000) (2,000)  　
Consolidated Deficit 　   (16,560)(1) 13,590   (2,970)  　

　

(1) The consolidated operating deficit is after the provision for compensatory payments and commuted pension gratuity payments under the Voluntary Retirement Scheme and Voluntary Departure Scheme introduced in 2000-2001. These payments are one-off in nature and amount to $5.7 billion in 2001-2002.
(2) For the purpose of the Medium Range Forecast, investment earnings of the Land Fund are consolidated with the General Revenue Account recurrent revenue.
(3) Advances and equity investments from the Capital Investment Fund are excluded from government expenditure (see also Note 1 to Table 4).

SECTION IV -ESTIMATES OF CONTINGENT LIABILITIES

17    The Government's contingent liabilities are estimated to be $14,000 million at 31 March 2001 and $11,600 million at 31 March 2002 respectively, comprising:

　

2000-2001

2001-2002

$m

$m
Guarantee to the Hong Kong Export Credit Insurance Corporation for liabilities under contracts of insurance

7,100

7,500
Litigation 300        300       
Possible capital subscriptions to the Asian Development Bank

1,900

1,900

Guarantees provided under the Special Finance Scheme for Small and Medium Enterprises

4,700

1,900

_________

________

Total

14,000

11,600

_________

________

　


 
  APPENDIX B
 
  TRENDS IN PUBLIC EXPENDITURE 1996-1997 TO 2001-2002
  


 
 

INTRODUCTION

         The purpose of this appendix is to present trends in public expenditure over the period 1996-1997 to 2001-2002. This analysis is expressed in public expenditure terms as defined in Table 4 of Appendix A and includes expenditure by the Trading Funds, the Housing Authority, the Lotteries Fund and the previous Provisional Urban Council and Provisional Regional Council (up to 31 December 1999). It shows the actual and estimated recurrent and total expenditure during this period and expresses this in terms of ten main policy area groups (an index showing the policy areas forming part of these ten main groups is provided at index of policy area groups):

    Community and External Affairs
    Economic
    Education
    Environment and Food
    Health
    Housing
    Infrastructure
    Security
    Social Welfare
    Support

Where appropriate, policy area groups are further analysed by policy areas.

2    Details of the individual heads of expenditure contributing to a particular policy area are provided in an index in Volume I of the 2001-2002 Estimates. This index further provides details by head of expenditure of individual programmes which contribute to a policy area.

3    The analysis provided in this appendix shows how resources have been and will, in 2001-2002, be allocated to different policy area groups. Where appropriate, historical figures have been adjusted to comply with the current classification of expenditure.

HISTORICAL PERSPECTIVE: THE MAJOR FEATURES

4    The changing share of expenditure on policy area groups from 1996-1997 to 2001-2002 is illustrated in Tables 1 and 2. Table 1 relates to recurrent public expenditure and Table 2 to total public expenditure.

Recurrent Public Expenditure by Policy Area Group 1996-1997 to 2001-2002 Table 1
Policy Area Groups Actual Revised Estimate
(Note) 		Draft Estimate
(Note)
1996-1997 1997-1998 1998-1999 1999-2000 2000-2001 2001-2002
% % % % % %
(A) Community and External Affairs 　 　 　 　 　 　

    (1) District and Community Relations

 0.7 0.7 0.8 0.8 0.8 0.8

    (2) Recreation, Culture and Amenities

 2.9 2.9 2.9 2.8 2.6 2.7
　 3.6 3.6 3.7 3.6 3.4 3.5
(B) Economic 5.5 5.8 5.4 5.2 5.2 5.3
(C) Education 21.6  21.2  21.8  22.0  22.0  21.7 
(D) Environment and Food 4.0 4.3 4.2 4.2 4.0 3.9
(E) Health 14.5  15.1  15.3  15.3  15.1  14.5 
(F) Housing 6.8 6.6 6.3 6.0 6.6 6.4
(G) Infrastructure 　 　 　 　 　 　

    (1) Buildings, Lands and Planning

 1.5 1.4 1.4 1.4 1.4 1.7

    (2) Transport

 1.3 1.4 1.4 1.5 1.4 1.4

    (3) Water Supply

 2.7 2.6 2.6 2.6 2.6 2.5
　 5.5 5.4 5.4 5.5 5.4 5.6
(H) Security 　 　 　 　 　 　

    (1) Immigration

 1.1 1.1 1.1 1.1 1.0 1.0

    (2) Internal Security

 10.8 10.1  9.7  9.4 9.2 8.8

    (3) Other

 1.7 1.6 1.7 1.8 1.8 1.7
　 13.6  12.8  12.5  12.3  12.0  11.5 
(I) Social Welfare 10.8 11.8  13.5  13.7  13.6  13.8 
(J) Support 14.1  13.4  11.9  12.2  12.7  13.8 
　 100.0    100.0    100.0    100.0    100.0    100.0  
Total Recurrent Public Expenditure $m $m $m $m $m $m
156,159 172,419 187,857 195,272 202,685 219,415
Total Public Expenditure by Policy Area Group 1996-1997 to 2001-2002 Table 2
Policy Area Groups Actual Revised Estimate
(Note) 		Draft Estimate
(Note)
1996-1997 1997-1998 1998-1999 1999-2000 2000-2001 2001-2002
% % % % % %
(A) Community and External Affairs 　 　 　 　 　 　

    (1) District and Community Relations

 0.6 0.6 0.6 0.6 0.7 0.7

    (2) Recreation, Culture and Amenities

 3.0 2.8 2.7 2.8 2.3 2.2
　 3.6 3.4 3.3 3.4 3.0 2.9
(B) Economic 5.5 7.3 8.0 4.6 4.6 5.4
(C) Education 17.9  20.0  18.2  18.7  18.6  19.0 
(D) Environment and Food 5.4 5.6 5.0 4.6 4.1 4.1
(E) Health 11.9  11.9  11.8  11.8  11.6  11.7 
(F) Housing 11.5  10.5  14.6  17.0  18.6  13.1 
(G) Infrastructure 　 　 　 　 　 　

    (1) Buildings, Lands and Planning

 3.5 3.2 3.1 3.0 3.1 4.9

    (2) Transport

 4.3 3.1 2.5 2.4 2.2 2.2

    (3) Water Supply

 2.8 2.7 3.1 3.1 2.9 2.7
　 10.6  9.0  8.7 8.5 8.2 9.8
(H) Security 　 　 　 　 　 　

    (1) Immigration

 0.9 0.8 0.8 0.8 0.8 0.9

    (2) Internal Security

 9.3 8.0 7.3 7.5 7.5 7.7

    (3) Other

 1.3 1.3 1.3 1.3 1.4 1.3
　 11.5  10.1  9.4 9.6 9.7 9.9
(I) Social Welfare 8.5 9.3 9.9 10.2 10.2  10.8 
(J) Support 13.6  12.9  11.1  11.6  11.4  13.3 
　 100.0    100.0    100.0    100.0  100.0   100.0   
Total Public Expenditure $m $m $m $m $m $m
211,248 234,780 266,448 269,484 278,385 290,665

　

Note:

The percentage share of expenditure for Support has increased in 2001-02 due to the inclusion of the expenditure which is one-off in nature under the Voluntary Retirement Scheme and the Voluntary Departure Scheme. The percentage share for other policy area groups has therefore been correspondingly reduced.

5    Recurrent public expenditure and total public expenditure in 2000-2001 and 2001-2002, analysed by policy area groups, are shown in Tables 3 and 4 respectively together with details of the real growths in expenditure between the two years.

Analysis of Recurrent Public Expenditure by Policy Area Group Table 3
Policy Area Groups Revised Estimate Draft Estimate Increase Increase In Real Terms(Note 1)
2000-2001 2001-2002
$m $m $m %
(A) Community and External Affairs 　 　 　 　

    (1) District and Community Relations

   1,620   1,880       +260 + 15.0

    (2) Recreation, Culture and Amenities

   5,340   5,835       +495    +8.9
　   6,960   7,715       +755  +10.3
(B) Economic 10,450  11,680    +1,230  +10.6
(C) Education 44,565  47,550    +2,985   + 5.5
(D) Environment and Food   8,030   8,635       +605   + 7.1
(E) Health 30,540  31,810    +1,270   + 3.2
(F) Housing 13,485  13,900       +415   +1.0
(G) Infrastructure 　 　 　 　

    (1) Buildings, Lands and Planning

   2,870   3,765       +895  +29.9

    (2) Transport

   2,845   3,015 +170  + 5.5

    (3) Water Supply

   5,285   5,505 +220  + 3.4
　 11,000 12,285    +1,285 +10.9
　 　 　 　 　
(H) Security 　 　 　 　

    (1) Immigration

   2,095   2,250   +155 + 6.3

    (2) Internal Security

 18,680 19,340   +660 + 2.3

    (3) Other

   3,515   3,710   +195 + 5.1
　 24,290 25,300 +1,010 + 3.1
(I) Social Welfare 27,555 30,230 +2,675 + 9.3
(J) Support 　 　 　 　

    (1) Central Management for the Civil Service
    (Note 2)

 15,510 19,630 +4,120 +25.8

    (2) Others

 10,300 10,680    +380   +3.0
  25,810 30,310 +4,500 +16.8
Total Recurrent Public Expenditure 202,685  219,415     +16,730  + 7.3
Note 1: As the 2001-2002 draft Estimate has included assumptions on price changes for various expenditure components (e.g. salaries, operating expenses, plant and equipment, etc.), the % increase is calculated after adjustment to bring the expenditure figures for 2000-2001 and 2001-2002 to the same price level.
Note 2: It includes total expenditure of $1,100 million in 2000-2001 and $4,100 million in 2001-2002 which is one-off in nature under the Voluntary Retirement Scheme and the Voluntary Departure Scheme introduced in 2000-2001.

 

Analysis of Total Public Expenditure by Policy Area Group Table 4
Policy Area Groups Revised Estimate Draft Estimate Increase Increase In Real Terms(Note 1)
2000-2001 2001-2002
$m $m $m %
(A) Community and External Affairs 　 　 　 　

    (1) District and Community Relations

   1,875   2,020      + 145  + 6.9

    (2) Recreation, Culture and Amenities

   6,450   6,490        + 40  + 0.2
　   8,325   8,510      + 185   + 1.7
(B) Economic 12,890 15,570   + 2,680 + 19.4
(C) Education 51,670 55,330   + 3,660   + 5.9
(D) Environment and Food 11,360 11,825     + 465   + 3.6
(E) Health 32,355 33,935  + 1,580  + 3.9
(F) Housing 51,905 37,950 - 13,955 - 27.6
(G) Infrastructure 　 　 　 　

    (1) Buildings, Lands and Planning

  8,585   14,225  + 5,640 + 64.7

    (2) Transport

  6,285  6,490   + 205  + 2.9

    (3) Water Supply

  8,045  7,870 　- 175   - 2.9
　 22,915 28,585  + 5,670 + 24.1
(H) Security 　 　 　 　

    (1) Immigration

   2,110   2,500 　+ 390 + 17.0

    (2) Internal Security

 20,910 22,375  + 1,465  + 5.8

    (3) Other

  3,860   3,980   + 120  + 2.8
　 26,880 28,855 + 1,975  + 6.3
(I) Social Welfare 28,445 31,375 + 2,930  + 9.9
(J) Support 　 　 　 　

(1) Central Management for the Civil Service (Note 2)

 16,685 23,115 + 6,430 + 37.4

(2) Others

 14,955 15,615    + 660   + 3.7
　 31,640 38,730 + 7,090 + 21.5
Total Public Expenditure 278,385   290,665    + 12,280   + 3.5

Note 1: As the 2001-2002 draft Estimate has included assumptions on price changes for various expenditure components (e.g. salaries, operating expenses, plant and equipment, etc.), the % increase is calculated after adjustment to bring the expenditure figures for 2000-2001 and 2001-2002 to the same price level.
Note 2: It includes total expenditure of $1,300 million in 2000-2001 and $5,700 million in 2001-2002 which is one-off in nature under the Voluntary Retirement Scheme and the Voluntary Departure Scheme introduced in 2000-2001.

　

INDEX OF POLICY AREA GROUPS


 
Policy Area Group Description by Policy Area Reference
(Note)
Community and
External Affairs		 District and Community Relations 19
Recreation, Culture and Amenities and Entertainment Licensing 18

Economic Air and Sea Communications 3
Commerce and Industry 6
Employment 8
Financial Services 1
Information Technology, Telecommunications and Broadcasting 17
Posts, Power and Competition Policy 4
Public Safety 7
Travel, Tourism and Consumer Protection 5

Education Education 16

Environment and Food Environmental Hygiene 32
Environmental Protection and Conservation 23
Food Supply and Food Safety 2

Health Health 15

Housing Housing 31

Infrastructure Buildings, Lands and Planning 22
Transport 21
Water Supply 24

Security Immigration Control 10
Internal Security 9
Administration of Justice 12
Anti-Corruption 13
Legal Administration 11
Legal Aid 20

Social Welfare Social Welfare 14
Women's Interest 33

Support Central Management of the Civil Service 26
Complaints Against Maladministration 30
Constitutional Affairs 28
Intra-Governmental Services 27
Revenue Collection and Financial Control 25
Support for Members of the Legislative Council 29

Note: The Policy Area Reference corresponds with that used in the Index of Policy Areas in the Estimates of Expenditure.

　

　


 
  APPENDIX C
 
  GROWTH IN RECURRENT PUBLIC EXPENDITURE IN 2001-2002 IN MAJOR POLICY AREA GROUPS
 


 
 

          The key improvements contributing to the growth in recurrent public expenditure in Education, Health, Security and  Social Welfare are detailed below:
　
 

Education (+$2,985 million)

  • 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 coordinate library services and support the Extensive Reading Schemes

  • Providing training in connection with proficiency assessment

  • Additional schools joining the Direct Subsidy Scheme

　
 

Health (+$1,270 million)
  • 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

　
 

Security (+$1,010 million)

  • 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

　

 

Social Welfare (+$2,675 million)
  • 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 service 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

　

　


 
  APPENDIX D
 
  MAJOR CAPITAL PROJECTS
TO BEGIN IN 2001-2002
 


 

           Funds allocated for capital projects to start in 2001-2002 include -
$ million
(at 2000-2001 prices level)
Economic 1,392
____________
  • Science Park at Pak Shek Kok - phase 1 remaining works

　

Education
 		 4,507
____________
  • Construction of additional primary and secondary schools
  • School Improvement Programme
  • Construction of buildings and hostels in universities
     
Environment and Food
 		 4,833
____________
  • 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
     
Infrastructure
 		 37,035
____________
  • 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

　

Security
 		 944
____________
  • West Kowloon Magistracy Building

　


 
  APPENDIX E
 
  GLOSSARY OF TERMS
 

Note: Terms shown in bold italic are defined elsewhere in the glossary.
Capital expenditure.

    All expenditure charged to the Loan Fund, the Disaster Relief Fund, the Capital Works Reserve Fund and the Innovation and Technology Fund plus expenditure from General Revenue Account on plant, equipment and works and capital subventions, excluding transfers to Funds. It does not include advances and equity investments made from the Capital Investment Fund.

Capital revenue.

    All revenue credited to the Funds and the exceptions listed under recurrent revenue.

Cash surplus/deficit.

    The difference between total Government revenue and total Government expenditure.

Consolidated surplus/deficit.

    Cash surplus/deficit after advances and equity investments from the Capital Investment Fund.

Fiscal reserves.

    The accumulated balances of the General Revenue Account (including the Land Fund) and Funds. They are also known as Government reserves.

Funds expenditure.

    Expenditure charged to the Capital Works Reserve Fund, the Loan Fund, the Disaster Relief Fund, the Capital Investment Fund and the Innovation and Technology Fund. Transfers to or from the Funds are not relevant to the level of expenditure.

Funds revenue.

    All receipts, except transfers from General Revenue Account, which are credited directly to the Funds. These comprise -
     

      Capital Works Reserve Fund

      donations for projects
      land premia
      investment income
      recovery from MTR Corp Ltd
      recoveries from Trading Funds

      Loan Fund

      loan repayments received
      interest on loans
      interest on balances

      Capital Investment Fund

      repayments received
      dividends
      interest
      interest on balances

      Disaster Relief Fund

      investment income

      Civil Service Pension Reserve Fund

      investment income

      Innovation and Technology Fund

      loan repayments received
      investment income

      For the purpose of the Medium Range Forecast, investment income of the Land Fund is classified as General Revenue Account revenue.

          　

      General Revenue Account expenditure.

        All expenditure charged to General Revenue Account in accordance with the Appropriation Ordinance, excluding transfers to Funds.

      General Revenue Account revenue.

        All receipts credited to any of the revenue heads, excluding transfers from Funds. For the purpose of the Medium Range Forecast, the investment earnings of the Land Fund are consolidated with the General Revenue Account revenue. In 2000-2001 and 2001-2002, this excludes exceptional receipts arising from the MTR Privatisation Share Offer (see note (b) under Appendix A paragraph 11).

      Government expenditure.

        The aggregate of operating expenditure and capital expenditure. It is not the same as public expenditure.

      Government revenue.

        The aggregate of Funds revenue and General Revenue Account revenue, including exceptional receipts in 2000-2001 and 2001-2002 arising from the MTR Privatisation Share Offer.

      Operating expenditure.

        All expenditure from General Revenue Account charged to any of the subheads listed in the Estimates under 'Recurrent Account', plus Other Non-Recurrent expenditure.

      Operating surplus/deficit.

        The difference between General Revenue Account revenue and General Revenue Account expenditure.

        　

      Public expenditure.

        Government expenditure plus -

        expenditure (recurrent and capital) by the Trading Funds and the Housing Authority ; and payments from the Lotteries Fund.　

      Recurrent revenue.

        All revenue credited to General Revenue Account, excluding transfers from Funds and the following -

        disposal proceeds of government quarters
        estate duty
        taxi concessions
        recovery from Housing Authority under current financial arrangement
        donations
        repayment of loans and advances

        which are treated as capital revenue.

        Exceptional receipts in 2000-2001 and 2001-2002 arising from MTR Privatisation Share Offer are also treated as capital revenue.

      Taxation

          earnings and profits tax
          estate duty
          duties
          general rates
          bets and sweeps tax
          hotel accommodation tax
          stamp duties
          air passenger departure tax
          motor vehicle taxes
          royalties and concessions

　

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