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HONG KONG - The financial chief of China"s Hong Kong Special Administrative Region (HKSAR) government said on Wednesday that Hong Kong"s total expenditure in the new fiscal year is estimated to be HK$557.9 billion (about $71.5 billion), up 17.6 percent compared to 2017-18.

When delivering Hong Kong"s annual budget today, Financial Secretary of HKSAR government Paul Chan Mo-po said operating expenditure for 2018-2019 is estimated to be HK$441.5 billion, a year-on-year increase of 18.4 percent.

"Recurrent expenditure, which accounts for over 90 percent of operating expenditure, will reach HK$406.5 billion, a year-on-year increase of 11.8 percent," he said.

Total government revenue of Hong Kong for 2018-2019 is estimated to be HK$604.5 billion, of which earnings and profits tax is estimated at HK$218.4 billion. The revenue from land premium is estimated to be HK$121 billion, while that from stamp duties is estimated to be HK$100 billion, according to Chan.

In 2018-2019, the estimated recurrent expenditure on education, social welfare and healthcare accounts for about 60 percent of government recurrent expenditure, exceeding HK$230 billion in total. Recurrent expenditure in these three areas recorded a cumulative increase of 42.8 percent over the past five years, Chan said.

Chan forecasted a surplus of HK$46.6 billion in the consolidated account in the coming year. Fiscal reserves are estimated to be HK$1,138.6 billion by the end of March 2019, equivalent to 40.3 percent of GDP.

In the budget, the financial chief put focuses on areas including the promotion of diversified economy and the investment in livelihood issues such as healthcare services, relieving the public"s financial burdens.

Chan said that Hong Kong has to focus on biotechnology, artificial intelligence (A.I.), smart city and financial technologies (Fintech) amidst keen competition in the innovation and technology (I&T), and he will set aside an additional 50 billion HK dollars for the development of I&T.

The government will allocate HK$20 billion on the first phase of the Hong Kong-Shenzhen Innovation and Technology Park in the Lok Ma Chau Loop and inject HK$10 billion into the Innovation and Technology Fund to support research and development.

Healthcare is an issue of utmost concern to the community in Hong Kong, Chan said, the government"s expenditure on public healthcare services will increase by 13.3 percent to HK$71.2 billion.

Chan proposed to allocate additional recurrent funding of nearly HK$6 billion to the Hospital Authority, and some additional HK$200 million to enhance the healthcare professional training.

"To support the second 10-year hospital development plan, improve the clinic facilities in the Department of Health, and upgrade and increase healthcare teaching facilities, I have set aside a sum of HK$300 billion as an initial provision," Chan said.

In the past, it was a budgetary criterion that public expenditure should be kept at or below 20 percent of GDP, he said, adding that one of the considerations was to avoid over-expansion of the government, which might not be conducive to resource deployment.

During the period between the 2018-2019 budget and the subsequent years in the medium range forecast, the public expenditure will be slightly higher than 21 percent of GDP, he noted.


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