FINANCIAL SYSTEM AND ECONOMY
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only other source of funds being loan repayments. In 1981-2, total loans paid from the Student Loan Fund amounted to $102 million, and estimated loans for 1982-3 amount to $130 million.
The Capital Works Reserve Fund was established on January 20, 1982, for the purpose of financing the Public Works Programme and land acquisitions, expenditure on these being previously met directly from the General Revenue Account. The fund's income is entirely derived from transfers from the General Revenue Account, and the amount of such transfer each year is determined in the light of available resources, particularly from the proceeds of land sales. In 1981-2, total expenditure from the General Revenue Account on public works and land acquisitions amounted to $6,938 million, and estimated expenditure from the Capital Works Reserve Fund in 1982–3 is $8,372 million.
Budgetary policy seeks to relate the growth rate of the public sector to the growth rate of the gross domestic product (GDP). The growth rate of the public sector in real terms accelerated from 5.2 per cent in 1976-7 to 15.5 per cent in 1977-8 and to 21 per cent in 1978-9, but was slowed down to seven per cent in 1979–80. It accelerated again to 17.8 per cent in 1980-1. The average annual growth rate for these years taken together was 13.1 per cent, which exceeded the growth rate of the GDP at 12.3 per cent over the same period. In 1981-2, an attempt was made to slow down the growth rate of the public sector to 12.8 per cent, but in the event increased expenditure which was not anticipated and could not be avoided, resulted in a further acceleration to 21.8 per cent, well in excess of the growth rate of the GDP in 1981 of 11 per cent. The budget for 1982-3 provided for a slowing down of the growth rate of the public sector to 10.7 per cent against a forecast growth rate at that time of the GDP of eight per cent. Actual performance will be very different, particularly in respect of the growth rate of the GDP.
The relative size of the public sector increased steadily from 14.2 per cent in-1976–7 to 20.3 per cent in 1980-1. It increased again to 22.9 per cent in 1981-2 and is further expected to increase in 1982-3 to at least 24 per cent.
General Revenue Account
Expenditure on the General Revenue Account is usually around 88 to 90 per cent of public sector expenditure taken as a whole, and the General Revenue Account is thus the main instrument of budgetary policy. It is estimated expenditure on the General Revenue Account that makes up the draft Estimates of Expenditure which are presented by the Financial Secretary to the Legislative Council when he delivers his annual Budget Speech, and it is the total estimated expenditure on the General Revenue Account for which appropriation is sought in the Appropriation Bill introduced into the Legislative Council at the same time. The Estimates of Expenditure contain the details of estimated recurrent and capital expenditure of all government departments, including estimated payments to subvented organisations and estimated transfers to the various statutory funds. They also provide for the repayment of the public debt.
In the financial year 1981-2, total gross expenditure on the General Revenue Account was $27,778 million, comprising recurrent expenditure of $16,295 million and capital expenditure of $11,483 million. Estimated expenditure in 1982-3 is $35,523 million, com- prising recurrent expenditure of $19,466 million and capital expenditure of $16,057 million.
Surplus and Deficit
With only two exceptions, the General Revenue Account has shown a surplus at the end of each year in the past 20 years. The exceptions were 1965–6 when a deficit of $137