XN000022-1977-03-02 — Page 13

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WEDNESDAY, MARCH 2, 1977

ON THE OTHER HAND, HE CONTINUED, DISABILITY AND INFIRMITY CASES INCREASED DURING THE YEAR ENDING ON NOVEMBER 30, 1976 BY OVER 10 PER CENT FROM 63,700 TO NEARLY 70,700.

THE FINANCIAL SECRETARY POINTED OUT THAT A FURTHER INCREASE WAS EXPECTED IN THE COMING FINANCIAL YEAR, LARGELY BECAUSE OF THE INCREASING NUMBER OF APPLICANTS FOR INFIRMITY ALLOWANCES FOR WHICH ALL PERSONS AGED 75 AND OVER WERE ELIGIBLE.

+PROVISION HAD BEEN MADE FOR AN AVERAGE MONTHLY CASELOAD DURING 1977-78 OF 74,700,+ HE SAID.

$40 MILLION SURPLUS IN GENERAL REVENUE FORECAST

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THE FINANCIAL SECRETARY, THE HON. PHILIP HADDON-CAVE, TOLD THE LEGISLATIVE COUNCIL TODAY THAT THE GOVERNMENT'S GENERAL REVENUE ACCOUNT WOULD BE IN SURPLUS IN 1977-78 BY $167 MILLION BEFORE ALLOWING FOR HIS TAX CONCESSION PROPOSALS AND $40 MILLION AFTER ALLOWING FOR THEM.

IN HIS BUDGET SPEECH, MR. HADDON-CAVE SAID: THE CONSOLIDATED ACCOUNT SHOWS A DEFICIT OF $44 MILLION BEFORE AND $171 MILLION AFTER ALLOWING FOR MY TAX CONCESSIONS, +

THIS DEFICIT OF $171 MILLION ARISES FROM THE HOUSING AUTHORITY'S DEFICIT AND OTHER SMALL DEFICITS OUTSIDE THE GENERAL REVENUE ACCOUNT.

MR. HADDON-CAVE SAID THE DEFICIT WOULD BE FINANCED FROM DRAWINGS ON THE DEVELOPMENT LOAN FUND AND OTHER HONG KONG DOLLAR RESERVES AND WOULD INVOLVE TRANSFERRING HONG KONG DOLLAR DEPOSITS FROM PUBLIC SECTOR TO THE NON-BANK PRIVATE SECTOR.

+THIS WILL BE INFLATIONARY, BUT ONLY TO A VERY SMALL EXTENT AND WILL BE TANTAMOUNT TO THE PUBLIC SECTOR HAVING A NEUTRAL IMPACT ON THE ECONOMY IN MONETARY TERMS,+ HE SAID. +I AM SURE THIS IS RIGHT FOR 1977-78, PARTICULARLY AFTER THIS YEAR'S UNEXPECTED SURPLUS IN THE ACCOUNTS OF THE PUBLIC SECTOR BETWEEN $800 MILLION AND $900 MILLION WHICH WILL HAVE HAD A SMALL DEFLATIONARY EFFECT.

+TAKING THE TWO YEARS TOGETHER, THE EFFECT OF THE PUBLIC SECTOR'S OUT-TURN WILL HELP TO MAINTAIN THE EXTERNAL PRICE COMPETITIVENESS OF THE ECONOMY AT A TIME WHEN IT HAS BEEN OPERATING NEAR FULL CAPACITY AND WHEN IT WILL CONTINUE TO DO SO, FINANCIAL SECRETARY.

SAID THE

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