Finance Bureau

In the past year, we have been working on 22 pledges, of which:

The following sets out the detailed report for each main programme area.

Controlling Government Expenditure

Year Pledge Present Position
Action Completed
1996 1. From 1996-2001, we will inject into the Airport Authority and the Mass Transit Railway Corporation the balance of the $60.3 billion for the new airport and airport railway projects under the Airport Core Programme. We have already injected the balance, i.e., $1.1 billion into the Airport Authority and $4 billion into the Mass Transit Railway Corporation, thus completing the planned equity injection into these two bodies under the Airport Core Programme.
Action in Progress: On Schedule
1996 2. From 1996-2001, $18.2 billion is forecast to be spent on various capital works under the Airport Core Programme. For the 18-month period up to September 1997, we have spent $8.2 billion, i.e., 45% of the total forecast expenditure on various capital works under the Airport Core Programme.
1996 3. From 1996-2001, $602 million is forecast to be spent on government facilities for the second runway at the new airport. Works for the project are proceeding on schedule and tenders are being called for the system and equipment required for the project. We expect to spend about $40 million on this project in the 1997-98 financial year.
1996 4. From 1996-2001, about $125.6 billion is forecast to be spent on non-Airport Core Project capital works projects, including : We estimate that in 1996-97, we spent about $17.8 billion on non-Airport Core Project capital works projects, including :
     
  • Land formation and flood control
21.5 billion
  • Land formation and flood control
1.9 billion
   
  • Education
18.0 billion
  • Education
2.5 billion
   
  • Port works
15.0 billion
  • Port works
1.5 billion
   
  • Transport
14.5 billion
  • Transport
2.3 billion
   
  • Environment
12.4 billion
  • Environment
1.6 billion
   
  • Health and welfare
12.0 billion
  • Health and welfare
2.7 billion
   
  • Waterworks
8.8 billion
  • Waterworks
1.4 billion
1994 5. To develop our financial information systems and to provide managers with appropriate financial management training. To improve our financial information systems :

  1. we have made available the Ledger Accounting and Financial Information System (LAFIS) Departmental Reporting System to six departments, and aim to extend it to all departments by the end of 1998-99;

  2. we are testing the Purchase Order Processing System with a view to implementing it on a pilot basis in October 1997; and

  3. we have been organising seminars and workshops on financial information systems regularly.

As for financial management training, we have organised two-day courses for 2 648 officers at MPS 34 or above since October 1994, and one-day courses for 443 officers at MPS 16-33 since March 1997.

On-going Commitments
1996 6. To respond to the community's demands for more and better public services while maintaining our commitment to small government and low taxes.

To strike the right balance in allocating the new resources generated by continuing economic growth to different policy areas.

We have prepared the 1997-98 Budget and completed the 1997 Resource Allocation Exercise in full accordance with these principles.
1996 7. To maintain a vigorous campaign to promote greater efficiency and value-for-money in the public sector. We have given, and will continue to give, advice to bureaux and departments to promote better value for money and greater efficiency in the delivery of government services.
1996 8. To devolve, as far as possible, resource and spending decisions to bureau and departmental managers. We have further delegated the power of write-off by departments to Departmental Secretaries ranked at or above MPS 45.


Raising Revenue

Year Pledge Present Position
Action Completed
1996 1. To extend the optional Pay-As-You-Earn scheme to cover civil service pensioners in late 1996. We have amended the Tax Reserve Certificates (Fourth Series) Rules (Cap. 289 sub.leg.) and enhanced our computer system to allow civil service pensioners to join the Pay-As-You-Earn scheme. As at the end of September 1997, 500 civil service pensioners have joined the scheme.
1996 2. To streamline and improve the administration of the motor vehicle first registration tax system and introduce amendments to the Motor Vehicles (First Registration Tax) Ordinance in late 1996 to minimise disputes over tax assessment and opportunities for tax evasion. The Motor Vehicles (First Registration Tax) (Amendment) Ordinance 1997 came into operation in March?997. We will continue to enforce the amended provisions to minimise disputes over tax assessment and opportunities for tax evasion.
1996 3. To receive a further $1.8illion in back taxes and penalties in 1996-97. In 1996-97, we completed 1 832 field audit and investigation cases, recovering over $2illion of back taxes and penalties.
1995 4. To set up in 1996-97 two additional investigation and enforcement teams in the Customs and Excise Department to combat the smuggling, illegal sale and misuse of diesel oil. The Customs and Excise Department deployed resources for establishing two additional investigation and enforcement teams to set up a dedicated Diesel Oil Enforcement Division. Since June 1996, the Division has arrested a total of 360 persons and seized about 820 000 litres of diesel oil with a duty potential of about $2.5illion.
On-going Commitments
1996 5. To continue to enforce strictly the legislation against the use of service companies to avoid or reduce salaries tax liability; and on the keeping of proper business records for tax purposes. Since August 1995, we have raised assessments on 475 cases, with tax payment totalling $85 million, involving the use of service companies to reduce salaries tax liability. We have also imposed compound penalties totalling $2.5 million on 110 taxpayers since August 1995 for failure to comply with the record-keeping requirements.
1996 6. To step up our fight against tax evasion, minimise the opportunities for tax avoidance and ensure that all taxes due are fully paid. We have completed 1 435 investigation and 1 370 field audit cases for the 18-month period ending 30 September 1997, recovering $3.2 billion of back taxes and penalties.


Automating the Government

Year Pledge Present Position
Action Completed
1996 1. To spend $330 million on major computerisation projects and another $330illion on other computer applications/projects in 1996-97. In 1996-97, we have spent $294illion on departmental Information Systems Strategy Plans and $376illion on other computer applications/projects. We caught up with the spending on major computerisation projects in August 1997, up to when we have spent $341 million on such projects.
1996 2. To improve in 1996-97 the provision of microcomputers and computer workstations to a ratio of 300 workstations per 1 000 civil servants at a cost of $240illion. As at end March 1997, we have already achieved a ratio of 320 workstations per 1 000 civil servants at a cost of about $270illion. By September 1997, we have attained the ratio of 355 workstations per 1 000 civil servants.
1996 3. In 1997-98, to strengthen technical support and advice to government departments on the use of microcomputers, mid-range computers and computer networks by streamlining our help-desk service. We have merged our help desks into a centrally managed Bureau Help Desk to strengthen technical support and advice to government departments.
1996 4. In 1997-98, to provide, together with the Secretary for the Civil Service, technical support and advice on Chinese computing to facilitate the use of Chinese in communications within the Government and with the public. We have set up a Chinese Office Automation Special Interest Group for microcomputer users to share experience. Two meetings have been held since the group's formation to advise participants on the use and opportunities of information technology for Chinese computing.
Action in Progress: Behind Schedule
1996 5. To complete the first batch of the second phase of the Government Office Automation Programme, involving 22 departments, by the end of 1996. We have installed Government Office Automation systems for 17 departments. Installation works for the remaining five departments are in progress. The delay is due to a number of reasons, including the longer-than-expected time taken for confirmation of user requirements and network design; the technical complexity in integrating the Government Office Automation systems with the existing computer systems in various departments; the time spent on negotiating and liaising with service suppliers; and the additional time required for site preparation works due to shortage of labour resources in the industry. We expect to complete the installation work for the remaining five departments by June 1998.


Preparing for the Transition

Year Pledge Present Position
Action Completed
1996 1. To support the Secretary for Planning, Environment and Lands to introduce draft legislation in 1996-97 to provide statutory authority for the assessment and collection of rents under Annex III of the Joint Declaration. To install a new computer system to handle the billing and collection of these rents. The Government Rent (Assessment and Collection) Ordinance and the related Regulations were enacted in May 1997 and June 1997 respectively. We have also installed a new computer system and issued some 950 000 quarterly demands for Government rent (the majority in a combined demand note with rates) in July 1997.
1995 2. To co-operate with the Chinese side on the preparation of the 1997-98 Budget from the start of the new planning cycle in April 1996. Also to involve the Chief Executive (Designate) and his team once they are in place. The British and the Chinese sides reached consensus on the contents of the 1997-98 Budget and legislation giving effect to the Budget has been enacted.
1994 3. To consider with the Chinese Government the practical arrangements for the transfer of the Hong Kong Government's assets to the future Hong Kong Special Administrative Region Government on 1獱uly 1997. Agreed Minute on the transfer of Hong Kong Government's assets and liabilities in their entirety to the Government of the Hong Kong Special Administrative Region upon the commencement of 1 July 1997 was signed by the two senior representatives of the Sino-British Joint Liaison Group on 28 June 1997.


Progress Report