12
domestic product in 1973 as yields from 1973-74 assessments were of the gross domestic product in 1972. This was because the large amount of tax on profits from the 1972-73 stock exchange boom had come to an end by 1st April 1973 (1.e. the beginning of the basis period for the profits which would normally be brought to charge in 1974-75 assessments).
30.
My honourable Friend also argued tht my estimate of revenue from stamp duties is unduly pessimistic. The yield from this head of revenue is, of course, even more difficult to estimate, depending as it does so much on future stock market turnovers and the state of the property market. All I can say is that based on current trends, this estimate
is, if anything, on the optimistic side. The same applies
to my estimate of revenue from land sales.
31.
The fact is our ability to spend has now caught up with our ability to finance spending after the former lagged in the immediate post-1967 years and then the latter led.
32.
At the same time, optimism or pessimism apart, there is an unusual degree of uncertainty about our economic prospects and, as a consequence, not only must our available fiscal reserves be kept intact (and remember they are less
significant in terms of annual expenditure than they used to be), but also we must proceed cautiously in 1974-75 in order to safeguard or try to safeguard our position in the three year forecast period. For let there be no misunderstanding
on one point in particular: we are locked in to a very high
proportion of recurrent expenditure and capital works cannot
be stopped or even slowed down once contracts have been let.
Quoting my honourable Friend Mr. Williams somewhat out of context "it is not easy to slow down committed government expenditure". And, further I would remind honourable Members that, unlike
the revenue forecast, the expenditure forecast is not based
on an assumption as to the trend, but has been carefully
compiled from departmental returns.
/33....