XN000022-1972-03-01 — Page 38

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Wednesday, March 1, 1972

This $3,923 million reserve would just about cover the outstanding expenditure commitment as at February 9 of $3,424 million in Category A projecta

in the Public Works Programe.

Mr. Haddon-Cave went on to say that in considering Hong Kong's reserve position the main, and indeed the primary, determinant of incomes and hence of revenue yields, "is the economy's export performance over which we can exercise but a limited degree of control".

"This exposed external position means that we must maintain a strong

reserve position in relation to annual expenditure," he added.

Revenue Fall

"Obviously, should our trade and hence the growth of our revenue

ever slacken off seriously we must be in a position to maintain recurrent

services and the level of capital expenditure either until the rate picks

up again or, if this takes too long and our reserves are in danger of being rapidly depleted, until we can cut the rate of growth of expenditure methodically,"

he said.

To do this would not be easy,

he added.

A cutback of plans for a steady expansion of recurrent services could

and to slow down only be achieved at a social and administrative cost; expenditure on capital works would probably be costly in the sense that nugatory expenditure would be involved, he said.

In addition, this would be difficult to organise, not only because of the problem of selecting the projects to be slowed down, but also because of the sheer size of the Public Works Programme, he added.

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