-
7
WEDNESDAY, FEBRUARY 29, 1984
THE DEFICIT ON CAPITAL ACCOUNT IS CONSEQUENTLY EXPECTED TO BE $7.2 BILLION, $930 MILLION LESS THAN ORIGINALLY EXPECTED, SIR JOHN SAID.
+WITH THE TRANSFER OF THE 1983-84 DEFICIT TO THE GENERAL REVENUE BALANCE, OUR REASSURING FISCAL RESERVES WILL BE ABOUT $15.8 BILLION. MOST IS LENT TO THE EXCHANGE FUND AGAINST INTEREST BEARING DEBT CERTIFICATES.
+AFTER ALLOWING, ON THE BASIS OF THE USUAL GEARING OF THREE, $7.6 BILLION AS COVER FOR OUR FORMAL CONTINGENT LIABILITIES (WHICH WILL BE ABOUT $22.7 BILLION BY MARCH 31, 1988, THE LAST YEAR OF THE NEW FORECAST PERIOD), WE SHOULD HAVE AT APRIL 1, 1984 'FREE' FISCAL RESERVES OF ABOUT $8.2 BILLION, HE SAID.
WHILE THESE FREE RESERVES ARE AVAILABLE FOR USE IN A +DISCIPLINED AND INTELLIGENT MANNER, THE LIMITS ARE OBVIOUS, HE NOTED.
+AS WE DIP INTO THE WELL WE MUST REMEMBER THAT THERE IS NO INFLOW, SIR JOHN ADDED.
PUBLIC SPENDING SET AT $44 BILLION
*****
THE FINANCIAL SECRETARY, THE HON SIR JOHN BREMRIDGE IN HIS BUDGET SPEECH TODAY PROPOSED $44 BILLION AS THE TOTAL PUBLIC SECTOR EXPENDITURE FOR FISCAL 1984-85 ON THE CONSOLIDATED ACCOUNT.
THIS REPRESENTS AN INCREASE OF 9.5 PER CENT IN MONEY TERMS OVER THE REVISED ESTIMATE OF $40.2 BILLION FOR FISCAL 1983-84.
+IN REAL TERMS THIS IS BELOW THE EXPECTED GROWTH RATE OF THE GDP TO ALLOW FOR SENSIBLE MARGINS, SIR JOHN SAID.
BUT HE POINTED OUT THAT THE EXPENDITURE FOR THE REVISED ESTIMATES WERE NECESSARILY BASED ON ONLY NINE MONTHS' PERFORMANCE SO THAT SIGNIFICANT CHANGES IN THE LAST THREE MONTHS OF THE FINANCIAL YEAR COULD RENDER THE ESTIMATES INACCURATE.
BUT, SIR JOHN SAID THAT THE NEW COMPUTERISED SYSTEM OF UPDATING THE ACCOUNTS HAD AT LEAST ENABLED HIM TO BASE HIS REVISED ESTIMATES ON NINE-MONTH, INSTEAD OF SEVEN-MONTH,FIGURES.
+
+TO THAT EXTENT, I HOPE THEY WILL PROVE MORE PRECISE THAN IN THE PAST, BUT THEY CAN NEVER BE WHOLLY ACCURATE, HE ADDED.
SIR JOHN REAFFIRMED HIS INTENTION TO ENSURE THAT THE GROWTH RATE IN REAL TERMS IN PUBLIC SECTOR EXPENDITURE ON CONSOLIDATED ACCOUNT WOULD NOT EXCEED, OVER A PERIOD OF YEARS, THE GDP GROWTH RATE.
THE PUBLIC SECTOR'S SHARE OF THE GDP HAS BEEN COMPLICATED THIS FINANCIAL YEAR BY THE AMENDMENTS MADE TO THE GDP ESTIMATES.
/ON THE