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WEDNESDAY, OCTOBER 26, 1994
NOR CAN A CONVINCING CASE BE MADE FOR INCREASING
EXPENDITURE BEYOND OUR GUIDELINE. YOU ONLY HAVE TO THINK OF THE EFFECT ON OUR ALREADY TIGHT LABOUR MARKET, AND ON INFLATION. MORE POSITIVELY, THE FACT IS THAT OUR PRESENT SYSTEM IS DELIVERING THE GOODS. MOST PLACES IN THE WORLD WOULD THINK REAL INCREASES IN EXPENDITURE OF 5% PER ANNUM WERE ALREADY EXTREMELY GENEROUS. AND THE FACT IS THAT PRIORITISING, OFTEN ΤΟ REFLECT MEMBERS' OWN PREFERENCES, INCREASED RECURRENT SPENDING IN KEY AREAS BY MUCH MORR AVERAGE. FOR EXAMPLE, WHILE OVER THE LAST FIVE YEARS TOTAL SPENDING HAS GROWN BY 32% IN REAL TERMS, WE HAVE INCREASED SPENDING :
BY
WE HAVE THAN THE RECURRENT RECURRENT
ON HEALTH
ON SOCIAL WELFARE
ON EDUCATION
ON ENVIRONMENT
FEES AND CHARGES
BY 70%
BY
53X
BY
36%
BY
72%.
ALL IN REAL TERMS.
SOME MEMBERS HAD VIEWS ON THE EXTENT TO WHICH FEES AND CHARGES SHOULD BE KEPT UP TO DATE. THE VAST MAJORITY ARE SET AT LEVELS WHICH SIMPLY RECOVER THE FULL COST OF PROVIDING THE SERVICE. THUS THEY FOLLOW INFLATION, NOT LEAD IT. EVEN IN RESPECT OF THOSE FEW CHARGES WHICH ARE TAX-LOADED, WE ARE VERY MINDFUL OF THE POSSIBLE EFFECT ON INFLATION WHEN CONSIDERING ADJUSTMENT.
OF COURSE NO-ONE LIKES TO PAY FEES AND CHARGES. AND THE TEMPTATION TO SUBSIDISE SERVICES WILL NO DOUBT BE STRONG. BUT IT SHOULD CONTINUE TO BE RESISTED. LET US BE CLEAR A DECISION NOT TO RECOVER FULL COSTS FOR A PARTICULAR SERVICE IS A DECISION THAT THE COMMUNITY AT LARGE SHOULD SUBSIDISE THE USERS OF THAT SERVICE. MAKING GOOD THE SHORTFALL FROM GENERAL TAXATION.
OUR PUBLIC FINANCE POLICY ALSO MAKES A MODEST CONTRIBUTION TACKLING THE INSIDIOUS PROBLEM OF INFLATION :
TO
FIRST, BY PRUDENT MANAGEMENT OF PUBLIC FINANCES, BY KEEPING THE PUBLIC SECTOR SMALL, BY DELIBERATELY PRIORITISING, WE EXERCISE THE SELF RESTRAINT NECESSARY TO FREE UP RESOURCES SO THEY CAN BE PUT TO BEST AND MOST ECONOMICALLY EFFICIENT USE IN THE PRIVATE SECTOR.
SECONDLY, BY INVESTING HEAVILY IN INFRASTRUCTURE. WHILE STILL KEEPING WITHIN OUR EXPENDITURE GUIDELINES, WE HAVE SET ASIDE HUGE SUMS TO REMOVE BOTTLENECKS AND IMPROVE FACILITIES. BY UNCLOGGING THE ARTERIES OF OUR BODY, WE KEEP THE PATIENT HEALTHY.
ECONOMIC
THIRDLY, BY IMPLEMENTING A CAREFUL POLICY ON FEES AND CHARGES THAT DOES NOT ADD TO INFLATION. YET BY ACHIEVING FULL COST RECOVERY, THE SYSTEM ENSURES THAT PEOPLE MAKE THE MOST ECONOMICALLY EFFICIENT CHOICES.
/CONCLUSION