Analysis of Public Expenditure by Policy Area Group

Commentary on the Changes in Total Public Expenditure in 2001-02

Total public expenditure is forecast to grow in 2001-02 by $12,280 million, or 3.5% in real terms over the revised estimate for 2000-01. Within this, total government expenditure will grow by $26,575 million, or 10.8% in real terms, comprising growth in recurrent expenditure of $16,365 million or 7.9%, and $10,210 million or 24.6% in capital expenditure. This year-on-year growth in capital expenditure is partly attributable to underspending in 2000-01. Expenditure from the Capital Works Reserve Fund, which makes up the majority of capital expenditure, is forecast to grow by $2,540 million or 8.6% in real terms.

The significant changes in capital expenditure contributing to the growth in total public expenditure are:

Community and External Affairs (+$185 million)
Capital spending in this policy area group will reduce by $570 million or 42.1% in real terms, reflecting the near completion of a number of major recreation, culture and amenities projects in 2000-01, including the Hong Kong Heritage Museum, the Hong Kong Central Library and the district community centre cum singleton hostel at Sai Ying Pun.

Economic (+$2,680 million)
Capital spending in this policy area group will rise by $1,455 million or 57.2% in real terms, reflecting additional spending in support of innovation and technology, including expenditure on Phase 1a and 1b and remaining works of the Science Park at Pak Shek Kok, projects that help promote innovation and technology upgrading in manufacturing and service industries, and additional drawdown of loans to small and medium enterprises and the Ocean Park Lowland Redevelopment Fund.

Education (+$3,660 million)
The increase reflects provision for additional loans to students pursuing tertiary education, non-profit making international schools, and private schools under the slope improvement scheme; and additional expenditure on the continuing programme of school-building and improvement works, capital payments to subvented primary and secondary schools for maintenance, repairs and minor improvement works, and enhancement to the information technology infrastructure for schools and the Education Department.

Environment and Food (+$465 million)
Capital spending in this policy area group will reduce by $135 million or 4.8% in real terms. This reflects completion of parts of the Strategic Sewage Disposal Scheme stage 1.

Health (+$1,580 million)
Capital spending on Health is forecast to rise by $310 million or 16.0% in real terms. The increase includes provision for redevelopment of the Caritas Medical Centre, preparatory work on the redevelopment and expansion of Pok Oi Hospital and construction of the Fanling primary health care centre.

Housing (-$13,955 million)
The reduction mainly reflects the forecast capital expenditure of the Housing Authority in 2001-02

Infrastructure (+$5,670 million)
Capital spending on Infrastructure is expected to rise by $4,380 million or 36.2% in real terms. This arises mainly from increased land acquisition for projects in the Public Works Programme and increased expenditure on site formation and related infrastructure works for Hong Kong Disneyland.

Security (+$1,975 million)
Capital spending on Security is forecast to rise by $970 million or 36.0% in real terms. This reflects the planned expenditure on the redevelopment of Police Headquarters, remaining works on expansion of kiosks and other facilities at the Lok Ma Chau boundary crossing, implementation of a new HKSAR identity card system, and the Third Generation Mobilising System for the Fire Services Department to handle fire and ambulance calls and mobilise fire and ambulance resources effectively and efficiently to the scene of incident.

Social Welfare (+$2,930 million)
Capital spending on Social Welfare is forecast to rise by $250 million or 28.0% in real terms. The increase reflects additional spending under the Lotteries Fund for various social welfare non-recurrent grants.

Support (+$7,090 million)
Capital spending on Support is forecast to rise by $2,595 million or 42.4% in real terms. The increase reflects the compensatory payments which are one-off in nature to officers retiring under the Voluntary Retirement Scheme introduced in 2000-01and additional housing loan assistance to civil servants.

Page up Page down Back to index