Amended budget law to be applied for 2017 public finance plan

The government plans to have the amendment to the law governing budget making to apply to the public finance plan for the fiscal year of 2017, a legal change that aims to enable the city’s Legislative Assembly to have better oversight of the administration’s spending – although not the power to approve a public budget plan. Starting from today, the government is conducting a 45-day public consultation on the amendment of the budget framework law, which aims to list all the budgeted expenditure on major investment plans, especially infrastructure projects that involve multiple years of investments. “For instance, if the government is to build a bridge now and lists a budget for it, the Legislative Assembly can see if the budget plan they deliver can support the amount [of investment] they need,” the deputy director of the Financial Services Bureau, Daisy Ho In Mui, said yesterday of the proposed amendment to the budget law. “The Legislative Assembly’s role is to deliberate the budget plan, not to approve it – the government has to explain how they are spending the money to see if the Assembly agrees to it,” Ms. Ho stressed. Under the amendment, the administration will have to report to the Legislative Assembly the overall budgeted expenditure they need for a project, and the years they need to execute the budget for the project. Currently, the official disclosure of the annual budget plan only includes regular and capital expenditure without a detailed description of the cost of major infrastructure projects. Ongoing lag The proposed amendment comes at a time when the city’s ongoing lag in major infrastructure projects and ballooning budgets plus lack of update of the budget information have been roundly criticised. An example is the Light Rapid Transit (LRT) project, on which a damning report was published by the Audit Commission in January disclosing that the estimated project cost has already surged from MOP4.2 billion in 2007 to MOP14.3 billion five years later. If the government can see the proposed changes to the budget framework law discussed and deliberated upon by the Legislative Assembly this year the amended law can be applied to the making of the budget plan for fiscal 2017, the leading officials of the Financial Services Bureau confirmed to media yesterday in a briefing. The proposed changes to the law also hold that public departments will have to submit a report of their half-yearly budget execution and the related accounting information to the Legislative Assembly before the end of July every year, a task that adds to the existing practice of submitting a yearly budget execution report to the Assembly by every year-end. Any changes or increase in the overall expenditure budget made for a fiscal year will have to go via the deliberation of the Legislative Assembly, the amendment stated. The budget allotted for a particular department or a project is also prohibited from being transferred to other departments or uses, the Bureau says. Another major change the government proposes to the budget law is that no more than 3 per cent of annual budgeted expenses can be reserved for emergency expenses – a difference to the existing rule where there is no upper limit set to the amount of budget reserved for emergency expenses.