Estimates for 2015-16
158. Operating expenditure for 2015-16 is estimated to be $354.3 billion, representing an increase of 11.5 per cent or $36.6 billion over the revised estimate for 2014-15. Recurrent expenditure accounts for $324.6 billion, or over 90 per cent of the 2015-16 operating expenditure, which is an increase of $18.3 billion or six per cent over the revised estimate for 2014-15. In the past ten years, recurrent expenditure has been increasing with a cumulative growth of 73.4 per cent over 2005-06. This demonstrates Government's continued commitment towards improving people's livelihood.
159. Of the recurrent expenditure for the next financial year, almost 60 per cent will be deployed for education, health and social welfare, the three major livelihood-related policy areas. Recurrent expenditure on education, the largest spending area of Government, will be $71.4 billion, or 22 per cent of recurrent expenditure. New initiatives to be introduced from the 2015/16 academic year include progressively increasing the intake of senior-year undergraduate places in University Grants Committee-funded institutions from 4 000 to 5 000 per annum in the 2018/19 academic year, costing $475 million a year; and increasing the ratio of graduate teacher posts in public sector primary schools in phases, costing $328 million a year. Further to the increase in voucher value of the Pre-primary Education Voucher Scheme by $2,500 in the 2014/15 school year, the voucher value will again be adjusted upward by $2,500 in the 2015/16 school year; and the fee remission ceiling of the Kindergarten and Child Care Centre Fee Remission Scheme will also be raised in these two school years. These will involve additional expenditure of $840 million in the two school years.
160. Recurrent expenditure on medical and health services will be $54.5 billion, accounting for 16.8 per cent of recurrent expenditure. We shall continue to enhance our public healthcare services. Measures include providing 250 additional hospital beds, expanding the capacity of specialist out-patient clinics and general out-patient clinics, strengthening geriatric rehabilitation and outreach services, and increasing operating theatre sessions. More drugs with proven efficacy will be incorporated into the Hospital Authority Drug Formulary. These include the expansion of clinical application of special drug for treating multiple sclerosis, as well as new drugs for treating cancer, chronic hepatitis C and Crohn's disease. A total of 4 000 patients will benefit each year.
161. Recurrent expenditure on welfare will reach $59.7 billion, accounting for 18.4 per cent of recurrent expenditure. Ever since it was launched three years ago, the Public Transport Fare Concession Scheme for the Elderly and Eligible Persons with Disabilities has gradually been extended to cover MTR, franchised buses and ferries to benefit more people. From late March 2015, the scheme will be extended to cover green minibuses by phases. The recurrent expenditure of the scheme has increased by threefold to $900 million in three years' time. In addition, I shall increase the annual recurrent expenditure by $71 million to provide additional places for day care and residential care for the elderly, and improve relevant services. Government will also strengthen various support services for persons with disabilities and ex-mentally ill persons, including residential care services and community support services, which will involve an additional annual expenditure of $160 million.
162. I forecast that capital expenditure for 2015-16 will be $86.5 billion, including $70 billion on capital works. We have launched various capital works in recent years for developing transport infrastructure, increasing land supply, as well as medical, educational and leisure facilities, etc. They are of paramount importance in furthering socio-economic development and enhancing quality of life.
163. With a number of projects entering their construction peaks, capital works expenditure is expected to maintain at relatively high levels in the next few years. We are, however, concerned about the sluggish progress of deliberation in LegCo since the last session. This has resulted in the mounting of backlog of funding proposals.
164. Total government expenditure is estimated to reach $440.8 billion in the next financial year, 11 per cent more than that of last year. Public expenditure will be equivalent to 20.4 per cent of GDP.
165. The civil service establishment is expected to expand by 2 540 posts to 176 448 in 2015-16, representing a year-on-year increase of 1.5 per cent, similar to that of 2014-15. This has to do with manpower increase in government departments for implementing new policies and improving existing services.
166. Total government revenue for 2015-16 is estimated to be $477.6 billion, of which earnings and profits tax is estimated at $194.6 billion. Land revenue is estimated to be $70 billion.
167. Taking all these into account, I forecast a surplus of $36.8 billion in the Consolidated Account in the coming year. Fiscal reserves are estimated to be $856.3 billion by the end of March 2016, representing 36.8 per cent of GDP and equivalent to 23 months of government expenditure.
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