XN000022-1974-10-16 — Page 17

WEDNESDAY, OCTOBER 16, 1974

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PRUDENT AND CAREFUL APPROACH ON EXPENDITURE VITAL

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THE GOVERNMENT IS REQUIRED, UNDER PRESENT CIRCUMSTANCES, TO ADOPT A PRUDENT AND CAREFUL APPROACH TO EXPENDITURE IN THE FOLLOWING YEARS, THE GOVERNOR, SIR MURRAY HACLEHOSE, TOLD THE LEGISLATIVE COUNCIL TODAY.

ADDRESSING THE NEW SESSION OF THE COUNCIL, HE SAID THE GOVERNMENT WAS AWARE OF THE POSSIBILITY OF A BUDGET DEFICIT THIS YEAR, THOUGH THERE IS NOTHING PARTICULARLY ALARMING ABOUT THIS IN ITSELF.+

HOWEVER, THE GOVERNOR EXPRESSED SPECIAL CONCERN AT THE TREND OF RECURRENT EXPENDITURE WHICH HAS BEEN RISING AT A RATE OF NOT FAR SHORT OF 20 PER CENT ANNUALLY IN RECENT YEARS.

+1 DOUBT WHETHER IT NEED BE AS HIGH AS THIS IF WE IN THE PUBLIC SERVICE WERE AS PRODUCTIVITY-CONSCIOUS AS OUR COUNTERPARTS IN INDUSTRY.+

IN HIS REVIEW OF GOVERNMENT PROGRAMMES, HE BEGAN WITH THE BACKGROUND AGAINST WHICH HONG KONG HAD BEEN TAKING STOCK.

HE POINTED OUT THAT DURING THE LAST TWO YEARS, THE GOVERNMENT HAD PREPARED LONG-RANGE PLANS COVERING THE NEXT TEN YEARS IN MAJOR FIELDS OF SPENDING -- HOUSING, EDUCATION, MEDICAL AND HEALTH SERVICES AND SOCIAL WELFARE.

ADDED TO THESE WERE PLANS COVERING EXPENDITURE ON THE EXPANSION OF ROAD SYSTEM, THE KOWLOON-CANTON RAILWAY, THE MASS TRANSIT PROJECT, THE POLICE, THE PRISONS AND THE FIRE SERVICES, AS WELL AS COMMUNITY RELATIONS AND COUNTRYSIDE AMENITIES.

+TAKING INDIVIDUALLY, THE BROAD OBJECTIVES OF EACH INITIAL DRAFT PROGRAMME WERE BELIEVED TO BE PROBABLY WITHIN OUR RESOURCES ON CERTAIN ASSUMPTIONS, AND THESE ASSUMPTIONS OF COURSE INCLUDED A REASONABLE DEGREE OF FLEXIBILITY FROM YEAR TO YEAR AS THE ECONOMIC CIRCUMSTANCES OF HONG KONG MIGHT CHANGE,+ THE GOVERNOR SAID.

THOUGH HE BELIEVED THAT THE IMPACT OF ALL THESE PROGRAMMES ON THE BUDGET IN THE IMMEDIATELY FOLLOWING YEAR, THAT IS 74/75, PRESENTED NO PROBLEM, HE SAID IT WAS ONLY WHEN ALL WERE IN A REASONABLY COMPLETE FORM THAT IT WAS POSSIBLE TO ASSESS THEIR REAL FINANCIAL IMPLICATIONS FOR THE YEARS AHEAD.

+ IT WAS ONLY AT THIS POINT THAT-REALISTIC APPRAISAL. REVIEW AND DRAFTING OF THESE PROGRAMMES BECAME POSSIBLE.+ HE STRESSED.

REFERRING TO CAPITAL WORKS PROGRAMMES, HE QUOTED THE FINANCIAL SECRETARY WHO, EARLIER THIS YEAR, TOLD THE COUNCIL THAT AFTER ALLOWING FOR ALL ADDITIONAL RESOURCES FROM THE BORROWING AND TAXATION' THAT THE FINANCIAL SECRETARY CONSIDERED REALISTIC, THERE WAS A SHORT-FALL OF $1,960 MILLION OR ONE FIFTH OF THE TOTAL ESTIMATES FOR THE FORECAST PER 10D FROM 1975/76 TO 1977/78 INCLUSIVE.

/HE POINTED

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