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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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2006 | Important notices
Last revision date : 28 February, 2007