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>6.1 Mr Speaker, Sir, let me now summarise the FY2008 budget position. Before taking into account Net Investment Income Contributions, Special Transfers and the tax changes introduced in this year's Budget, we expect a surplus of $3.2 billion for FY2008. The various tax changes I have introduced will reduce FY2008 operating revenue by $0.5 billion. Further, the special transfers and tax rebates provided as part of the surplus sharing package this year, as well as the special transfers for FY2008 that were committed in the GST Offset Package last year, will cost an additional $2.8 billion. Together, these tax and transfer initiatives will bring the budget balance down to close to zero.
6.2 This is before adding Net Investment Income Contributions to our revenues, and setting aside funds to top up our various endowment funds and the National Research Fund, as well as the provisions we are making for other long term needs such as V- and D-Bonuses and the L-Bonus. The net effect of these additions is to bring the Overall Budget Balance for FY2008 to a deficit of $0.8 billion.
6.3 The Government will not need to draw on past reserves as the deficit can be fully financed by funds accumulated since the new Government took office in May 2006. Details of the revised fiscal positions for FY2007 and FY2008 can be found in Annex D.
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