BART 1: THE STATE OF THE PUBLIC FINANCES; 1974-75 TO 1977-78.
8. THE ACTUAL OUTTURN FOR 1976-77 WAS A SURPLUS OF DOLLARS 902 MILLION, SLIGHTLY MORE THAN THE DOLLARS 850 MILLION PREDICTED IN THE 1977 BUDGET SPEECH. SO FISCAL RESERVES AT 1 APRIL 1977 AMOUNTED TO DOLLARS 3,713 MILLION INSTEAD OF THE PREDICTED DOLLARS 3,660 MILLION.
9. THE REVISED ESTIMATES FOR 1977-78, AS PRINTED, SHOW A
SURPLUS OF DOLLARS 1,075 MILLION (EXCLUDING PROCEEDS OF A LOAN OF
DOLLARS 27 MILLION), AS COMPARED WITH A BUDGETTED SURPLUS OF DOLLARS 30 MILLION. THE REVISED ESTIMATE OF EXPENDITURE AT DOLLARS
8,160 MILLION IS ONLY DOLLARS 85 MILLION, OR ONLY 1 PERCENT, LESS THAN THE APPROVED ESTIMATE. THE REVISED ESTIMATE OF REVENUE
AT DOLLARS 9,235 MILLION EXCEEDS THE ORIGINAL ESTIMATE BY DOLLARS 960 MILLION, OR BY 12 PERCENT. THUS, IN BROAD TERMS, THE
INCREASED SURPLUS NOW FORECAST RESULTS FROM AN UNEXPECTED FLUSH OF REVENUE, PARTICULARLY FROM EARNINGS AND PROFITS TAXES, RATHER THAN
UNDER-EXPENDITURE.
10M BUT EVEN DOLLARS 1,075 MILLION MAY BE UNDERSTATED, AND SO A SURPLUS FOR 1977-78 OF DOLLARS 1,150 MILLION, BASED ON THE TREASURY'S CASH BOOK AT MID-FEBRUARY, IS ASSUMED FOR ESTIMATING THE LIKELY POSITION OF THE FISCAL RESERVES AT 1 APRIL 1978 OF DOLLARS 4,890 MILLION.
11. OVER THE FOUR YEAR 1974-75 TO 1977-78 TOTAL EXPENDITURE HAS GROWN BY 37 PERCENT IN MONEY TERMS, OR BY ABOUT 20 PERCENT IN REAL TERMS. IN 1974-75 A PLATEAU OF EXPENDITURE WAS REACHED FOR, WHILE TOTAL EXPENDITURE IN REAL TERMS INCREASED BY 11 PERCENT IN 1974-75, IT INCREASED BY ONLY 1 PERCENT IN 1975-76 AND RECOVERED ONLY SLIGHTLY TO INCREASE BY 3.4 PERCENT IN 1976-77. BUT IN 1977-78 IT JUMPED, AS INTENDED, BY NEARLY 16 PERCENT.
12. RECURRENT REVENUE INCREASED BY 57 PERCENT FOM DOLLARS 5,156
MILLION IN 1974-75 TO DOLLARS 8,074 MILLION IN 1977-78.
13. IN THREE OUT OF THE FOUR YEARS THE SURPLUS ON RECURRENT ACCOUNT
WAS MORE THAN SUFFICIENT TO FINANCE THE DEFICIT ON CAPITAL ACCOUNT, AND SO THERE WERE OVERALL BUDGET SURPLUSES. THIS WAS NOT
THE CASE IN 1974-75 AND SO THERE WAS AN OVERALL DEFICIT EVEN THOLE CAPITAL REVENUE MET MORE THAN 20 PERCENT OF CAPITAL EXPENDITURE.
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