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Wednesday, February 27, 1974
after allowing for several proposals for tax relief the main ones being
to encourage investment. The net result is that, in 1974-75, I am
Budgeting for a small furplus of about $20 million after allowing for
certain unavoidable commitments likely to arise during the year.
"Now only time will tell whether I have taken sufficient account
of the impact of the oil crisis on our economy and hence revenue yields.
The fact is we cannot afford to draw down our reserves in a year in
which, by a few relatively painless adjustments, the budget can be
balanced. There is a very simple reason for this: the cost of our
expanding public services and of our huge capital works programmes will
be immense. And even on the assumption that there is a steady growth
of revenue after the present turmoil is behind us, our reserves must
be kept in hand in case revenue unexpectedly fails to live up to our
expectations in any year.
"I explained the likely trend of expenditure over the three
years 1975-76 to 1977-78 at length in the budget speech. I pointed out
that, as far as I could see at the moment, the cost of carrying out
our various policies and programmes over these three years probably
exceeded the funds likely to be available by about $4,000 million.
"As the cost of running existing services will always tend to
have first call on our available funds, we must look at this shortfall
of $4,000 million in the wider context of the cost of our capital works
programmes over a longer period of, say, ten years. The cost of these
/programmes is