G.F. 326
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9
18.
The
on
latest estimate of annual expenditure
Consolidated Account, based on performance over the first
five months, is $39.7 billion, representing an increase of
$2 billion over the budget estimate. The upward revision
is due partly to land acquisition and other capital
expenditure in excess of savings elsewhere, but in the
main to civil
service
pay increases.
The latter
(including the associated subvented sector) represented a
rise of about $1.6 billion due to the annual increase, for
which as usual in the past no forward provision was made.
19.
I do not doubt that as a general rule the growth
rate of public sector expenditure over a period must have
regard to the growth rate of the economy.
seems
less
It should not
outrun it by more than a small margin, so that Government
is not pre-empting resources that would otherwise be used
to greater advantage by the private sector, in particular
for the production of exports. This argument, however,
applicable in 1982, a recession year, when
there is spare capacity in the economy and the pressure of
aggregate demand for resources on prices has generally
eased off. Nonetheless the growth rate of public sector
expenditure still requires close monitoring for the
the rest
of this year;
and it will have to be slowed down further
next year to ensure that, when the
Overseas
orders,
in
recovery comes
sufficient resources at competitive
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