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97. FINALLY, IN AN OPEN ECONOMY SUCH AS OURS, IT IS NECESSARY TO KEEP AN EYE ON THE BALANCE BETWEEN THE PUBLIC SECTOR AND THE ECONOMY
AS A WHOLE, FOR THIS PURPOSE IT IS NECESSARY TO SETTLE UPON A DEFINITION OF THE PUBLIC SECTOR AND USE IT CONSISTENTLY OVER TIME. THE CHOICE OF DEFINITION DEPENDS UPON WHICH CONSEQUENCES OF AN IMPROPER BALANCE ARE OF MOST CONCERN AND, OF COURSE, ON PRACTICAL CONSIDERATIONS. MY DEFINITION OF THE PUBLIC SECTOR IS RELATED TO
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THE SOURCE OF FUNDS, THAT IS TO SAY, INCLUDE WITHIN THE PUBLIC SECTOR ALL ACTIVITIES FINANCED FROM PUBLIC FUNDS, NO MATTER BY WHOM THE EXPENDITURE IS INCURRED.
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98. IN THE FOUR YEARS 1973-74 TO 1976-77 THE PUBLIC SECTOR, SO DEFINED, REPRESENTED 17.2% OF THE G.D.P. AT CURRENT PRICES COMPARED WITH 14.4% IN THE FOUR YEARS 1969-70 TO 1972-73: AND SO THE RELATIVE SIZE OF THE PUBLIC SECTOR HAS BEEN LIFTED BY A FIFTH IN THE LAST FOUR YEARS COMPARED WITH THE FOUR PREVIOUS YEARS. A PUBLIC SECTOR OF THIS RELATIVE SIZE IS CLEARLY WITHIN THE ECONOMY'S CAPABILITY AND, IF NECESSARY, COULD BE LIFTED A LITTLE FURTHER WITHOUT DETRIMENT: AND, INCIDENTALLY, THE ACCEPTABLE RELATIVE SIZE OF THE PUBLIC SECTOR IS LARGER ON THE DOWNSWING PHASE OF THE TRADE
CYCLE THAN ON THE UPSWING.
(B) REVISED AND EXTENDED GUIDELINES
99. NONE OF THESE FIVE GUIDELINES NEEDS REVISION BUT, AS THE GUIDELINE FIGURES FOR THE VARIOUS COMPONENTS OF THE CAPITAL ACCOUNT WERE FIXED IN 1974, AND WE ARE NOW APPROACHING THE LAST YEAR OF THE THEN FORECAST PERIOD, THESE FIGURES NEED UPDATING FOR THE NEXT FORECAST PERIOD 1978-79 TO 1992-81, THE FORECAST OF CAPITAL EXPENDITURE FOR EACH OF THESE THREE YEARS IS DOLLARS 3,050 MILLION, DOLLARS 2,790 MILLION AND DOLLARS 2,870 MILLION RESPECTIVELY EXPENDITURE ENVISAGED ON THE TWO PUBLIC WORKS PROGRAMME COMPONENTS OF THE CAPITAL ACCOUNT AMOUNTS TO DOLLARS 2,300 MILLION, DOLLARS 2,340 MILLION AND DOLLARS 2,320 MILLION WITH A GROWING EMPHASIS ON NEW TOWNS AND HOUSING AS URBAN AREA DEVELOPMENTS ARE COMPLETED.
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