WEDNESDAY, FEBRUARY 28, 1979
1
TELEVISION TALK ON BUDGET
****
+
THE FINANCIAL SECRETARY, THE HON. PHILIP HADDON-CAVE SPOKE ON THE 1979-80 BUDGET IN A TELEVISION BROADCAST THIS (WEDNESDAY) EVENING.
THE FOLLOWING IS THE FULL TEXT OF HIS SPEECH1
GOOD EVENING 1
+THIS AFTERNOON IN THE LEGISLATIVE COUNCIL I SPENT SOME TIME EXPLAINING THE PRESENT STATE OF OUR ECONOMY AND OF THE GOVERNMENT'S FINANCES, I THEN WENT ON TO SAY HOW I THOUGHT WE SHOULD DEAL WITH SUCH PROBLEMS AS LIE AHEAD, AND YET CONTINUE TO PROSPER AND HOW THE GOVERNMENT INTENDED TO PUSH AHEAD WITH ITS VAR IOUS PROGRAMMES.
+YOU WILL REMEMBER THAT FOR TWO YEARS, IN 1974 AND 1975, OUR ECONOMY GREW VERY SLOWLY BECAUSE OF THE WORLD-WIDE RECESSION. BUT THANKS TO THE DYNAMIC THRUST AND FLEXIBILITY OF OUR FREE ENTERPRISE SYSTEM, WE QUICKLY MOVED INTO A PERIOD OF UNPARALLELED PROSPERITY AS SOON AS WORLD TRADE BEGAN TO RECOVER IN LATE 1975.
+THE TOTAL VOLUME OF GOODS AND SERVICES PRODUCED BY OUR ECONOMY INCREASED BY 44 PER CENT IN THE THREE POST RECESSION YEARS 1976 TO 1978- AND THE SERVICES AND FACILITIES OF ALL KINDS WHICH THE GOVERNMENT WAS ABLE TO PROVIDE INCREASED BY 50 PER CENT IN THESE SAME YEARS.
+BUT, BY THE MIDDLE OF THE YEAR, IT WAS BECOMING APPARENT THAT THE OVER-RAP ID GROWTH RATE OF DOMESTIC DEMAND, STEMMING FROM THE DEMANDS BEING MADE ON THE ECONOMY BY BOTH THE PRIVATE AND PUBLIC SECTORS, WAS BEGINNING TO LEAD US INTO TROUBLE: IT WAS NOT SO MUCH A MATTER OF RESOURCES NEEDED FOR EXPORTS BE ING SIPHONED OFF FOR PRODUCTION FOR DOMESTIC PURPOSES BUT, RATHER THAT TOTAL DEMAND FOR REAL RESOURCES, FOR EXAMPLE, OF LABOUR AND CAPITAL, WAS OUTSTRIPPING THE IR SUPPLY.
+ IN FACT, OUR EXPORT PERFORMANCE IN 1978 WAS REALLY REMARKABLY GOOD UP BY 14 PER CENT IN REAL TERMS.
+ BUT IMPORTS WERE GROWING VERY FAST INDEED UP BY 22 PER CENT ON 1977 THE TRADE DEFICIT WAS WIDENING RAPIDLY, THE RATE AT WHICH PRICES WERE INCREASING WAS BEGINNING TO ACCELERATE, THE MONEY SUPPLY WAS GROWING MUCH FASTER THAN THE ECONOMY'S TOTAL INCOME IN MONEY TERMS AND, BY THE END OF THE YEAR, BANK LOANS AND ADVANCES WERE UP BY 43 PER CENT.
THIS IS NOT TO SAY THAT 1978 WAS NOT, IN ITSELF, A GOOD YEAR- THE GROSS DOMESTIC PRODUCT IN REAL TERMS GREW BY 10 PER CENT HAVING GROWN BY 12 PER CENT IN 1977 AND 17 PER CENT IN 1976.
+AND, I MIGHT ADD, ALTHOUGH GOVERNMENT EXPENDITURE IN 1978-79 IS LIKELY TO BE $900 MILLION ABOVE THE ORIGINAL ESTIMATE, REVENUE - PARTICULARLY CAPITAL REVENUE HAS BEEN SO BUOYANT THAT THE ACCOUNTS ARE LIKELY TO SHOW A SURPLUS OF ABOUT $1,600 MILLION.
/+THUS THE