XN000022-1977-07-13 — Page 7

WEDNESDAY, JULY 13, 1977

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BUDGET SURPLUS EXPLAINED

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THE FINANCIAL SECRETARY, THE HON. PHILIP HADDON-CAVE SAID THE PREDICTION OF A SURPLUS OF $850 MILLION WAS BASED ON THE STATE OF THE TREASURY'S CASH BOOK AT FEBRUARY 16, A FORTNIGHT BEFORE BUDGET DAY.

+THIS PREDICTION WAS BASED ON A FORECAST OF EXPENDITURE AT $6,600 MILLION AND OF REVENUE AT $7,450 MILLION, MR. HADDON-CAVE EXPLAINED IN ANSWER TO QUESTIONS FROM THE HON. LYDIA DUNN, IN THE LEGISLATIVE COUNCIL TODAY.

+ IN THE EVENT, ACTUAL EXPENDITURE FOR 1976-77 TURNED OUT TO BE $6,591 MILLION, THAT IS LOWER THAN MY PREDICTION BY ONLY $9 MILLION, AN ERROR OF 0.1 PER CENT ONLY. ACTUAL REVENUE TURNED OUT TO BE $7,494 MILLION OR $44 MILLION MORE THAN MY PREDICTION OF $7,450 MILLION, AN ERROR OF 0.6 PER CENT ONLY, HE SAID.

THE ERROR WAS ACCOUNTED FOR BY HIGHER THAN EXPECTED YIELDS FROM BETS AND SWEEPS TAX AND FROM EARNINGS AND PROF ITS TAXES, HE SAID.

+ I CANNOT EXPLAIN AWAY HUMAN FRAILTY, BUT I CAN OFFER A PART EXPLANATION FOR THE HIGHER THAN PREDICTED YIELD FROM EARNINGS AND PROFITS TAXES.

+SOME 90,000 SALARIES TAXPAYERS MET THEIR LIABILITIES IN FULL BEFORE MARCH 31, 1977 INSTEAD OF TAKING ADVANTAGE OF THE INSTALMENT SYSTEM WHICH ALLOWS THEM TO DEFER ONE QUARTER OF THEIR LIABILITIES, MR. HADDON-CAVE POINTED OUT.

REFERRING TO MISS DUNN'S SECOND QUESTION ABOUT THE IMPLICATIONS OF THE SURPLUS ON THE CURRENT BUDGETARY POLICY, MR. HADDON-CAVE SAID THE SLIGHTLY LARGER THAN PREDICTED SURPLUS WOULD HAVE NO IMPLICATIONS.

THE SURPLUS PUTS OUR FISCAL RESERVES AT APRIL 1, 1977 AT $3,713 MILLION INSTEAD OF THE $3,660 MILLION ASSUMED IN THE PREPARATION OF THE 1977-78 BUDGET, MR. HADDON-CAVE ADDED.

+THE DIFFERENCE OF $53 MILLION REPRESENTS ONLY 0.32 PER CENT OF TOTAL ESTIMATED TURNOVER IN 1977-78 OF $16,500 MILLION, PUT ANOTHER WAY OUR FISCAL RESERVES AT THE BEGINNING OF THIS FINANCIAL YEAR, AFTER SETTING ASIDE $2,500 MILLION TO SECURE OUR CONTINGENT LIABILITIES, ARE STILL LESS THAN 15 PER CENT OF ESTIMATED EXPENDITURE THIS FINANCIAL YEAR.

+SO THE ACTUAL OUTTURN FOR 1976-77 HAS NO IMPLICATIONS FOR BUDGETARY POLICY IN 1977-78.+

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