Question – Are government officials in the budgeting department poor in forecasting?
The following are Hong Kong government’s experiences:-
- In 2009-10 budget, Financial Secretary John Tsang Chun-wah predicted a HK$39.9 billion deficit. But strong growth in income from stamp duty on property and stock transactions, the government may end up with a surplus of more than HK$10 billion.
- In 2006, then finance chief Henry Tang Ying-yen predicted a surplus of HK$5.6 billion for the 2006-07 financial year but recorded a HK$58.6 billion surplus.
- In 2001-02 budget, the then financial secretary Donald Tsang Yam-kuen predicted a HK$3 billion deficit. The government eventually recorded a HK$63.3 billion deficit.
- The best forecast was made by Donald Tsang in 2000. He predicted a HK$6.2 billion deficit for the 2000-01 financial year. The administration ended up with a deficit of HK$7.8 billion.
With another forecast of a budget deficit set to be proved wrong, a senior accountant has suggested the government carry out more frequent reviews of its financial position.