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Estimates of Expenditure
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| Allocation of Operating Expenditure |
70. Operating expenditure is estimated to be $213.6 billion for 2003-04, $212.2 billion for 2004-05, $203.4 billion for 2005-06, and $200 billion as targeted for 2006-07. Within these amounts, the Government will in the coming two years earmark a total of $8.6 billion to implement the second VR Scheme.
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71. To cut operating expenditure by $20 billion to $200 billion in four years entails a reduction of about 9%. In practice, the reduction to be borne by departments would be greater than 9% because some items, including civil service pensions and social security payments, will continue to increase. In order to achieve the overall expenditure reduction target, all departments will have to absorb such increases by making greater reductions.
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72. We estimate that the Government's total recurrent expenditure for 2003-04 will be $207 billion, an increase of 1% over the original estimate of $204.9 billion for 2002-03, with 23.8% for Education, 15.8% for Social Welfare, 15.4% for Health, 15.1% for Support, and 12.1% for Security. In preparing the future allocation of expenditure, consideration will be given to the community's priorities.
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| Estimates of Capital Expenditure |
73. The estimate of capital expenditure for 2003-04 is $43.2 billion, an increase of 0.8% over the original estimate for this year. From 2003-04 to 2007-08, annual capital expenditure will average $42.5 billion, of which around $29 billion will be set aside for works projects.
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Public Expenditure
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| 74. Total public expenditure for 2006-07 is estimated to be $262.5 billion, or 18.4% of GDP forecast for that year, in line with my target set last March of containing public expenditure at not more than 20% of GDP.
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