XN000022-1972-03-29 — Page 5

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Wednesday, March 29, 1972

"We need to consider our reserves in terms of the unspent balance

in Category A of the Public Works Programme, that is, projects to which we

are already fully committed."

At this moment that balance was $3,548 million compared with

$1,736 million about a year ago and $1,631 million in February 1970, he said.

"Thirdly, and this is surely significant, the years in which our

reserves have increased substantially have been years in which expenditure has

likewise increased."

At the beginning of 1970-71 the reserves amounted to $1,726 million

and although expenditure had increased by 21 per cent, the reserves at the

beginning of 1971-72 amounted to $2,475 million, duo mainly to a budget

surplus of $618 million.

Budget Surplus

In 1971-72 expenditure had increased by about 20 per cent and yet

the reserves at the beginning of 1972-73 would be about $3,900 million, due

partly to a budget surplus of about $700 million, he said.

"I would suggest that the conclusion to be drawn from these figures

is that our surpluses in recent years have been due to the strength of the

economy's growth movement, not to under-sponding or to under-provision for

spending," the Financial Secretary said.

One important fact he had to mention was that while the reserves

had increased from $1,173 million at April 1, 1968 to $3,923 million four

years later or by $2,750 million, only $1,975 million could be accounted for

by surpluses on the General Revenue Account, he said.

"The remaining