XN000022-1976-02-25 — Page 7

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WEDNESDAY, FEBRUARY 25, 1976

VIEWPOINT TALK BY THE FINANCIAL SECRETARY

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THE FOLLOWING IS THE TEXT OF THE TALK BY THE FINANCIAL SECRETARY BROADCAST TONIGHT :-

GOOD EVENING.

THIS AFTERNOON PRESENTED THE BUDGET FOR 1976-77 TO THE LEGISLATIVE COUNCIL. IT PROVIDES FOR EXPENDITURE NEXT YEAR OF $7,200 MILLION OR $1,000 MILLION MORE THAN THIS YEAR. OF THIS VAST SUM, $5,300 MILLION HAS BEEN EARMARKED FOR THE VARIOUS SERVICES PROVIDED BY THE GOVERNMENT RANGING FROM POLICEMEN IN THE STREETS, TO PUBLIC ASSISTANCE FOR THE NEEDY, TO MEDICAL CARE FOR THE SICK, TO TEACHERS FOR OUR SCHOOLS. AND $1,900 MILLION HAS BEEN EARMARKED FOR CAPITAL EXPENDITURE, MAINLY ON OUR PUBLIC WORKS PROGRAMMES IN THE URBAN AREAS AND IN THE NEW TOWNS.

REVENUE WILL MORE THAN MEET THE COST OF OUR DAY TO DAY SERVICES AND ALL BUT A FIFTH OF THE COST OF CAPITAL EXPENDITURE EVEN THOUGH THERE IS TO BE ONLY A MODEST INCREASE IN TAXATION. I AM BUDGETTING FOR A DEFICIT OF ABOUT $350 MILLION. THIS IS A SMALL DEFICIT, BUT IT DOES MEAN THAT I AM BUDGETTING FOR A DEFICIT FOR THE SECOND YEAR RUNNING. HOWEVER, I AM NOT WORRIED ABOUT THIS FOR FOUR REASONS. FIRST, THE DEFICIT THIS YEAR, 1975-76, IS LIKELY TO BE ONLY $50 MILLION COMPARED WITH THE $430 MILLION HAD BUDGETTED FÖR. THIS IS LARGELY BECAUSE EXPENDITURE ON OUR PUBLIC WORKS PROGRAMMES WAS LESS THAN ANTICIPATED DUE TO SUCH FACTORS AS LOWER COSTS AND THE WET SUMMER. SECONDLY, IT IS VERY POSSIBLE THAT REVENUE IN 1976-77 WILL BE RATHER MORE THAN SHOWN IN THE REVENUE ESTIMATES BECAUSE THE STRENGTH OF OUR ECONOMY ON THE UPTURN ALWAYS TENDS TO SURPRISE US. THIRDLY, EVEN IF THERE IS SOME INCREASE IN COSTS AND PRICES IN THE COMING YEAR, IT WILL REQUIRE A VERY CONSIDERABLE EFFORT TO SPEND AS MUCH AS $1,000 MILLION MORE NEXT YEAR THAN THIS YEAR. THAT MAY SOUND STRANGE, BUT THE FACT OF THE MATTER IS THAT EXPENDITURE ON LARGE CAPITAL WORKS PROGRAMMES IS QUITE OFTEN SUBJECT TO DELAYS CAUSED BY LATE DELIVERIES, BAD WEATHER AND LAND CLEARANCE PROBLEMS. FOURTHLY, WE REMAIN Á RELATIVELY DEBT FREE GOVERNMENT WITH RESERVES EQUAL TO MORE THAN ONE THIRD OF TOTAL EXPENDITURE AND SO I AM SURE WE CAN SAFELY BORROW TO FINANCE WHATEVER DEFICIT WE DO INCUR IN 1976-77. | MIGHT ADD THAT IT IS MY INTENTION THAT WE SHALL HAVE A BALANCED BUDGET WITHIN THE NEXT YEAR OR TWO.

I MENTIONED THAT WE WOULD BE SPENDING ABOUT $1,000 MILLION MORE NEXT YEAR THAN THIS YEAR AND THIS NATURALLY RAISES THE QUESTION: ON WHAT? WELL, I CANNOT GO THROUGH THE WHOLE OF THE EXPENDITURE SIDE OF THE BUDGET, BUT I CAN SAY THIS THERE IS EMPHASIS ON THOSE AREAS WHICH THE GOVERNMENT BELIEVES TO BE OF THE HIGHEST PRIORITY AND OF PUBLIC CONCERN.

/LET ME GIVE

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