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5
Fiscal Reserves
5. Our fiscal reserves at 1st April 1978 should
stand at:
General Revenue
$M
Balance at 31st March 1977
3,713
Add:
present estimate
of surplus in 1977-78
960
4,673
After allowing $3,000 million as cover for our
contingent liabilities (which will rise to at least
$9,000 million by 31st March 1982, the last year of the
new forecast period, thanks to the Tsuen Wan Extension of
the MTR and the Home Ownership Scheme, we shall have
free reserves of $1,673 million to finance our
seasonal deficits on General Account and any short term
difficulties.
Expenditure next year will be of the
order of $10, 250 million (c f as a matter of interest,
8440
expenditure in your first full year here as Governor,
2110
namely, 1972-73, or $3,800 million). Thus our position
will be a little better than the guideline which "requires"
us to maintain free reserves at the beginning of a
financial year equivalent to 15% of estimated expenditure
in the ensuing year; but this is comforting as I am
already rather fearful about the rate at which recurrent
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/ expenditure
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