XN000022-1976-02-25 — Page 13

WEDNESDAY, FEBRUARY 25, 1976

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SUBSTANTIAL INCREASE IN TOTAL SPENDING NEXT YEAR

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HONG KONG'S ESTIMATED EXPENDITURE FOR THE COMING FINANCIAL YEAR IS $7,212 MILLION, REPRESENTING AN INCREASE OF $990 MILLION OR 16 PER CENT ON THE REVISED ESTIMATE OF $6,222 MILLION FOR 1975-76.

THIS IS SUBSTANTIALLY ABOVE THE 4.2 PER CENT INCREASE IN 1975-76 ON 1974-75, THE FINANCIAL SECRETARY, THE HON. PHILIP HADDON-CAVE, SAID.

+IN REAL OR CONSTANT PRICE TERMS THE INCREASE IN 1976-77 IS TEN PER CENT OR NEARLY TWICE THE INCREASE IN 1975-76 ON 1974-75 OF 5.6 PER CENT, AND IS COMPARABLE WITH THE AVERAGE ANNUAL RATE OF INCREASE IN THE FIRST FIVE YEARS OF THE DECADE, NAMELY, 13 PER CENT.+

ANALYSING IN MORE DETAIL THE GOVERNMENT'S SPENDING NEXT YEAR, MR. HADDON-CAVE SAID RECURRENT EXPENDITURE AT $5,289 MILLION, REPRESENTED AN INCREASE OF $693 MILLION OR 15 PER CENT ON THE REVISED ESTIMATE OF $4,596 MILLION FOR 1975-76.

CAPITAL EXPENDITURE IN THE COMING YEAR WAS ESTIMATED AT $1,923 MILLION, OR ROUGHLY THE SAME AS THE ORIGINAL ESTIMATE FOR 1975-76, BUT 18 PER CENT UP ON THE REVISED ESTIMATE OF $1,626 MILLION.

ACTUAL CAPITAL EXPENDITURE MAY BE HIGHER IF THE DRAWINGS BY THE HOUSING DEPARTMENT FROM THE DEVELOPMENT LOAN FUND ARE SUCH AS TO REQUIRE FURTHER TRANSFERS FROM GENERAL REVENUE TO THE FUND (BY UP TO $124 MILLION). IN ADDITION $15 MILLION WILL BE REQUIRED FOR LICENSED AREAS AND $12 MILLION FOR THE CONVERSION OF A NUMBER OF PRIMARY SCHOOLS TO 12 SECONDARY SCHOOLS.

ON RECURRENT EXPENDITURE, THE FINANCIAL SECRETARY SAID THERE WAS TO BE A DOWNWARD TREND IN SPENDING ON PERSONAL EMOLUMENTS.

SUCH SPENDING ACCOUNTS FOR ONLY 37 PER CENT OF RECURRENT EXPENDITURE, COMPARED WITH 39 PER CENT IN 1975-76 (REVISED ESTIMATE) AND AN AVERAGE OF 43 PER CENT OVER THE FIRST FIVE YEARS OF THE DECADE.

THIS DOWNWARD TREND WAS ATTRIBUTED TO A FREEZE ON SALARIES IN 1975-76 COUPLED WITH A LIMIT OF 1/2 PER CENT ON INCREASES IN THE ESTABLISHMENT OF THE CIVIL SERVICE DURING THE SAME PERIOD, AND A RESTRICTION ON RECRUITMENT LIMITING THE NET INCREASE IN THE TOTAL STRENGTH. BESIDES. NO CONTINGENCY ELEMENT HAS BEEN INCLUDED IN THE ESTIMATES FOR A POSSIBLE SALARIES REVISION IN 1976-77.

/GROWTH IN

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