XN000022-1971-02-24 — Page 24

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24

Wednesday, February 24, 1971

SURPLUS OF $162 MILLION NEXT YEAR

No Deficit Despite Large Increase In Expenditure

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The difference between the draft estimates of revenue and expenditure

in the next financial year produced a surplus of $162 million, but this

was likely to be reduced "substantially"

though not eliminated

certain additional costs were finally determined.

when

Sir John Cowperthwaite, Financial Secretary, told the Legislative

Council today the Government was fortunate in that it could budget for an

unusually large increase in expendituro "without incurring a deficit."

He continued: "I have considered, however, whether I have detected,

in our financial experience, a causal connection, or at least a correlation,

between years of prosperity and increased revenues on one hand, and budgetary

deficits on the other.

"For both our deficits in recent years, that is, in 1959/60 and

1965/66, have come after a series of unusually prosperous years, which

have perhaps led us........into rather more spendthrift ways. There is,

as it happens, a similar correlation, or coincidence, between Salarios

Commissions and deficits."

But he was not "too concerned" about those correlations, in the

short term at least, as Hong Kong remained careful not to allow recurrent

spending to "catch up with recurrent revenues by quite a wide margin."

had frequently stressed the importance of the ratio between them.

He

/In