SECTUEE ULL LIES 'A'
having to borrow.
The need to service and repay this foreign debt is going to be a burden on our economy and balance of payments for several years ahead.
At the same time as we have to put right the balance of payments it is imperative that we should also tackle our long-standing problem of low growth. For many years our annual average growth rate has lagged far behind that of our major European Allies for example, it was only half that of France or the Federal Republic of Germany. The roots of economic growth - and this needs no explanation in Hong Kong are industrial investment and high
productivity. Our level of investment has been and remains low and we have to push it up.
With your
We have then no choice but to put our balance of payments in order and we must increase the level and efficiency of our investment. But the resources for these two priority sectors can only be found at the expense of private consumption and public expenditure. As I have already said, our wages policy by itself is likely to mean a fall in the living standards of the private citizen next year, and little room for improvement for several years ahead.
And we will have to be just as stringent on Government spending as on private spending. The public sector has recently and is now being financed by deficit borrowing on a scale which is simply not compatible with the long-term health of our economy. own traditions of prudent and careful financing you will understand that this cannot continue. The Government has already announced therefore that planned public expenditure next year will be lower than it is this year, and that it will be seeking further substantial economies in the following two years after that. our public expenditure programmes are therefore under the greatest pressure and are even now being subjected to the closest scrutiny, particularly when the expenditure is overseas. When we come to
publish the next Public Expenditure White Paper, all sorts of services will have to be cut back and many desirable projects sacrificed.
All
This then is the background against which we conducted our Defence Review in 1974 and are now again in 1975 having to re-examine our
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UK EYES 'A'