40.
The impact of this policy is clear. The relationship
between expenditure on consolidated account and GDP rose to over
19% in 1982-83 before falling back to just over 16% by 1984-85.
To stabilize the growth rate of public expenditure has meant
containing its share at around 16% to 17% of GDP. In relation to GDP the share of public expenditure is an estimated 16.5% for
both the years 1985-86 and 1986-87. The share is forecast to
move up slightly over the next two years, to just under 17% by
1988-89, in the light of some significant new commitments, but
should begin to fall back thereafter on the assumption that our
control over recurrent spending remains firm.
It
41.
There is every reason for continued vigilance in the
task of containing the relative size of the public sector.
is SO easy for expenditure to get out of hand. But given the
inevitable volatility of Hong Kong's economy, externally
oriented as it is, it is nevertheless neither possible nor
desirable to lay down precise year by year relationship between the growth rate of public expenditure and the growth
rate of GDP. What we have been achieving so far seems about
right.
42.
it
For the future, there is room for some further
improvement in facilities and services given the higher growth limit implied by the revised medium term projection of economic growth. Against this background, I am proposing that total expenditure growth be held to an average of around 5% over the forecast period. Recurrent expenditure is already growing at an
annual rate of just over 5% and I would be reluctant to see
grow much faster having regard to the implicit long-term commitment. Whilst, therefore, I have allowed for some increase in provision for new or improved services, my main emphasis is
increase in the а resuscitation of capital spending and an
pace at which we are tackling the list of outstanding projects. Capital expenditure has fallen by about 20% over the last three
on
years.
13
/43. So