11.2.87
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23
42.
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
Recurrent
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. expenditure is already growing at an annual rate of over
5% and I would be reluctant to see it 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 on a resuscitation of capital spending and an increase
in the pace at which we are tackling the list of
outstanding projects.
Capital expenditure has fallen by
about 20% over the last three years.
43.
In
So much for expenditure. On the revenue side, I
would like to begin by saying a few words about the
relationship between direct and indirect taxes.
1982-83 we saw direct taxes contributing 69% of the total
tax yield. This fell to 60% in 1983-84, but it has now
started to edge upwards again (12). There is no immutable
or clearly correct ratio between the yields from direct
and indirect taxes; but for the longer term I do not
(12)
See Appendix A (i). SECRET