FINANCIAL STRUCTURE
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and other sources - is sufficient to meet its recurrent expenditure on the management of public housing estates. In providing new housing estates under the government's public housing programme, the authority is provided with land - the value of which is reflected in the authority's balance sheet as a government contribution – and, where its cash flow is inadequate to meet construction costs, the authority may borrow from the Development Loan Fund. The Housing Authority also is the government's agents for squatter control, the clearance of squatters from Crown land required for develop- ment and the development of temporary housing areas. The cost of these activities is financed from general revenue.
Surpluses and Deficits
A small deficit in the government's accounts was returned in the first financial year after World War II. Subsequently - with the exception of 1959-60, 1965-6 and 1974–5 when there were deficits of some $45 million, $137 million and $380 million respec- tively - a series of surpluses, some of them substantial, were accumulated in the years up to, and including 1976-7. Such reserves are required to secure the government's contingent liabilities, to enable seasonal deficits to be met, and to ensure that the government is able to cope with short-lived tendencies for expenditure to-exceed revenue or for revenue yields to fall below expectations.
This accumulation of reserves was achieved partially through a strong growth in revenue. Particularly during the earlier years, this was done without appreciable in- creases in tax rates because of exceptionally rapid increases in population and, con- sequently, in economic activity. Revenue expanded more than 22 times from $309 million in 1951-2 to $6,898 million in 1976–7. The rate of increase was affected by variations in such factors as the economic situation and inflows of capital, and by the introduction of an appropriations-in-aid system in 1976-7 whereby certain depart- mental receipts, recovered by departments in the process of providing services to the public, were used to offset approved expenditure. The upward trend has, however, been strong and continuous. In expenditure, there was inevitably a time-lag before the government could develop community and social services necessary for an increasing population and made possible by economic growth itself. But as these services were developed at a gradually accelerated rate, the margin between recurrent expenditure and recurrent revenue narrowed.
The pace of economic growth gave rise to surpluses from 1969-70 to 1973-4, with the highest surplus of $640 million being achieved in 1971-2. There was a net deficit of $380 million in 1974–5, due largely to increased spending on public works, social welfare and university and polytechnic grants. But during 1975-6 and 1976-7, growth resumed and the accounts again returned to surplus. In 1976-7, revenue at $6,898 million (compared with the original estimate of $6,197 million) exceeded net expendi- ture (actual $5,996 million - original estimate $6,552 million) for the year by $902 million. Revenue and expenditure for the years 1975-6 and 1976–7, together with the estimates for 1977-8, are detailed and compared in Appendices 7 and 8. Sources of revenue and expenditure in various fields are shown proportionately by charts in Appendices 7a and 8a.
For 1977-8, the estimated revenue is $8,274 million and expenditure $8,245 million, giving an estimated surplus of $29 million for the year.