XN000022-1975-02-26 — Page 30

MISCUESDAY, FEBRUARY 26, 1975

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+AGAINST THIS BACKGROUND THE BUDGET FOR 1975-76 PROVIDES FOR EXPENDITURE NEXT YEAR OF $6,600 MILLION. THIS FIGURE HAS BEEN ARRIVED AT AFTER THE

BIDS FOR FUNDS RESULTING MOST THOROUGH SCRUTINY OF DEPARTMENTAL

REDUCTIONS TOTALLING NEARLY $1,400 MILLION. EVEN SO IT IS A SUBSTANTIAL INGREASE OF $430 MILLION ON WHAT ACTUAL EXPENDITURE IS LIKELY TO BE IN 1974-75 AND SOME OF THIS MONEY WILL PAY FOR A FURTHER EXPANSION OF OUR SOCIAL SERVICES. PROVISION HAS, FOR EXAMPLE, DEEN INCLUDED FOR 19,000 MORE PLACES IN SECONDARY SCHOOLS, FOR OPENING TWO NEW TECHNĪCAL INSTITUTES, FOR EXPANDING THE POLYTECHNIC, AID FOR OPENING THE NEW PRINCESS MARGARET HOSPITAL, THREE NEW CLINICS AND THE NEW CENTENARY BLOCK OF THE TUNG VAŬ GROUP OF HOSPITALS.

DUT THIS PROVISION FOR EXPENDITURE IS NOT PAINLESS. UNFORTUNATELY, EVEN AFTER THE PRUNING EXERCISE, THE REVENUE VG COULD EXPECT NEXT YEAR AT PRESENT TAX RATES FALLS SHORT OF EXPENDITURE BY $900 MILLION,

*SO THE QUESTION I HAD TO CONSIDER VERY CAREFULLY WAS THIS · HOW BEST COULD THE SHORTFALL DE COVERED? EXPENDITURE IN 1974-75 EXCEEDED REVENUE BY OVER $400 MILLION. THIS MEANT THAT OUR FISCAL RESERVES WERE RUN DOWN TO $2,370 MILLION, OR ONLY FOUR MONTHS WORTH OF EXPENDITURE. I DO NOT THINK WE SHOULD PLAN TO RUN THEM DOWN FURTHER. IN THESE UNCERTAIN TIMES, OUR RESERVES MUST DE KEPT INTACT TO FINANCE UNFORESEEABLE COMMITMENTS ARISING DURING THE YEAR AND TO COVER UNEXPECTED SHORTFALLS IN REVENUE.

·

*SO, 1 PROPOSED IN LEGISLATIVE COUNCIL THIS AFTERNOON That ROUGHLY HALF OF THE EXTRA $900 MILLION REQUIRED SHOULD BE FOUND FROM NEW AND ADDITIONAL TAXATION AND HALF BY BORROWINGS LOCALLY AND OVERSEAS.

+1 THINK MY TAX PROPOSALS SPREAD THE BURDEN EQUITABLY AND IN SUCH A WAY AS TO HAVE THE LEAST POSSIBLE EFFECT ON THE COST OF LIVING AND ON THE PROFITABILITY OF INDUSTRY. ADOUT $100 MILLION WILL COME FROM AN INCREASE IN THE RATE OF CORPORATION PROFITS TAX AND WILL, IN EFFECT, LARGELY DE DORNE BY PERSONS RECEIVING DIVIDENDS FROM SHARES. AN EXTRA $212 MILLION WILL DE RAISED FROM INDIRECT TAXES. HERE I HAVE TRIED TO SPREAD THE LOAD AS WIDELY AS POSSIBLE. MY PROPOSALS WILL LEAD TO INCREASES IN BETTING DUTY, IN THE GENERAL RATE, IN EXCISE DUTIES ON LIQUOR AND TOBACCO AND CERTAIN STAMP DUTIES AND I PROPOSE ALSO THE REINTRODUCTION OF ENTERTAINMENT TAX ON ADMISSIONS TO CINEMAS. FINALLY, $155 MILLION WILL BE RAISED FROM INCREASING VARIOUS FEES AND CHARGES WHICH ARE AN IMPORTANT SOURCE OF REVENUE GIVEN OUR LOW AND NARROWLY BASED TAX STRUCTURE- AND WE MUST ALSO MAKE SURE THAT THE PUBLIC UTILITY UNDERTAKINGS RUN BY THE GOVERNMENT SUCH AS THE WATERWORKS, THE AIRPORT AND THE POST OFFICE PAY THEIR WAY, I SHOULD JUST MENTION HERE IN PASSING, HOWEVER, THAT THE PROPOSED INCREASE IN THE CHARGE FOR WATER WILL ONLY AFFECT 20 PER CENT OF DOMESTIC CONSUMERS.

/+DY BORROWING

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