Estimates of Revenue and Expenditure

　

100.     Total expenditure for 2002-03, including the expenditure initiatives which I have announced today and assuming that civil service pay is reduced by 4.75% and subventions to the various organisations are reduced correspondingly, will amount to $259.8 billion.  I estimate that, after implementation of my revenue proposals, total revenue will be $214.6 billion.  The consolidated deficit will be $45.2 billion, equivalent to 3.6% of GDP. The operating deficit will be $62.0 billion before, and $49.3 billion after, inclusion of investment income from the fiscal reserves.  At 31 March 2003, the fiscal reserves are forecast to be $325.6 billion, equivalent to 15 months of government expenditure.

　

101.     When all the foregoing expenditure-control and revenue-raising measures are implemented and when we have taken further measures to make up the shortfall as targeted, the Government's fiscal position5 will be as follows -

　

 

2002-03

2003-04

2004-05

2005-06

2006-07

Operating surplus/(deficit) before investment income from fiscal reserves

$ billion

 

 

(62.0)

$ billion

 

 

(42.5)

$ billion

 

 

(32.2)

$ billion

 

 

(19.0)

$ billion

 

 

(10.8)

Operating surplus/(deficit) after investment income from fiscal reserves

(49.3)

(26.9)

(18.0)

(5.3)

2.8

Consolidated surplus/(deficit)

(45.2)

(38.7)

(15.9)

0.1

0.1

Consolidated surplus/(deficit) as % of GDP

3.6%

3.0%

1.2%

0.0%

0.0%

5               Please refer to Appendix A for the assumptions and details of the forecast.