10
WEDNESDAY, FEBRUARY 26, 1975.
$429 MILLION DEFICIT FORECAST IN 1975/76 DUDGET
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THE FINANCIAL SECRETARY, THE HON. PHILIP HADDON-CAVE, TODAY BUDGETED FOR A DEFICIT OF $429 MILLION FOR THE COMING FINANCIAL YEAR.
THIS HAS ALREADY TAKEN INTO CONSIDERATION THE $467 MILLION TO BE RAISED THROUGH REVENUE PROPOSALS. (THE DEFICIT FORECAST IN THE 1975-76 DRAFT ESTIMATES IS $096 MILLION).
HOWEVER, MR. HADDON-CAVE SAID HE DID NOT PROPOSE TO FINANCE THE DEFICIT BY RUNNING DOWN THE FISCAL RESERVES.
IN VIEW OF THIS, HE SAID HE HAD TO LOOK TO VARIOUS FORMS AND SOURCES OF LOAN FINANCE.
ON THE ECONOMIC IMPLICATIONS OF THE BUDGET. THE FINANCIAL SECRETARY SAID THE RATIO OF TOTAL EXPENDITURE FINANCED FROM PUBLIC FUNDS TO THE GROSS DOMESTIC PRODUCT AVERAGED 15 PER CENT OVER THE TEN YEARS TO 1973-74.
+AS A RESULT OF THE VERY LARGE INCREASE IN EXPENDITURE IN 1974-75, THERE WAS A JUMP TO NEARLY 20 PER CENT, HE SAID. +IN 1975-76 | EXPECT A FURTHER, BUT SMALL, INCREASE TO A LITTLE OVER 20 PER CENT.+
MR. HADDON-CAVE SAID THAT THE INCREASE IN TOTAL EXPENDITURE FINANCED FROM PUBLIC FUNDS IN 1975-76, AT 7-1/2 PER CENT IN MONEY TERMS, WOULD REFLECT SOME INCREASE IN REAL TERMS, SINCE THE UPWARD TREND OF COSTS, PARTICULARLY IN THE BUILDING AND CONSTRUCTION INDUSTRY, HAS NOW EASING.
+INDEED,+ HE SAID, IT IS ON THIS INDUSTRY THAT PUBLIC EXPENDITURE IMPINGES MOST HEAVILY.+
HE SAID THAT BECAUSE OF THE PRESENT RECESSION, WHICH IS AFFECTING THE BUILDING AND CONSTRUCTION INDUSTRY AS MUCH AS ANY OTHER, IT WAS APPROPRIATE TO MAINTAIN, AND EVEN INCREASE, THE LEVEL OF SPENDING THROUGH THE PUBLIC WORKS PROGRAMME AND THE HOUSING AUTHORITY,
MR. HADDON-CAVE SAID THAT IN 1974-75 THERE WAS A MAJOR SWING FROM SURPLUS TO DEFICIT, WITH EXPENDITURE RISING MUCH FASTER THAN REVENUE.
HE SAID. THE IMPACT OF THIS SWING ON THE ECONOMY WAS, OF COURSE, EXPANSIONARY, THOUGH LIMITED BY THE HIGH LEAKAGÉ INTO IMPORTS.
/+III 1975-76 ......*
J