XN000022-1978-03-01 — Page 4

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WEDNESDAY, MARCH 1, 1978

FINANCIAL SECRETARY PREDICTS RECORD SURPLUS

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THERE WILL BE A RECORD $1,150 MILLION SURPLUS IN THE GOVERNMENT'S ACCOUNTS AT THE END OF THIS FINANCIAL YEAR AS A RESULT OF +AN UNEXPECTED FLUSH OF REVENUE RATHER THAN A FAILURE OF EXPENDITURE+, THE FINANCIAL SECRETARY, THE HON. PHILIP HADDON-CAVE, REVEALED TODAY.

MOVING THE SECOND READING OF THE 1978/79 APPROPRIATION BILL IN THE LEGISLATIVE COUNCIL, MR. HADDON-CAVE SAID THE REVISED ESTIMATES OF REVENUE AND EXPENDITURE FOR 1977/78 ARE $9,235 MILLION AND $8,160 MILLION RESPECTIVELY, RESULTING IN A SURPLUS OF $1,075 MILLION.

+THIS FIGURE IS FAIRLY CLOSE TO THE ESTIMATE OF THE SURPLUS DERIVED FROM THE TREASURY'S CASH BOOK AT FEBRUARY 16 LAST, BUT NOT QUITE CLOSE ENOUGH.

+ACCORDINGLY, WHEN CONSIDERING OUR FINANCIAL POSITION AT APRIL 1 NEXT, I SHALL BE USING A FIGURE OF $1,150 MILLION BEING MY PREDICTION OF THE SURPLUS,+ HE SAID.

THE FINANCIAL SECRETARY DESCRIBED THE SURPLUS EQUAL TO 11.6 PER CENT OF TOTAL REVENUE AS +RATHER REMARKABLE, EVEN FOR THIS VERY REMARKABLE PLACE+, PARTICULARLY AS IT IS THE HIGHEST ON RECORD.

THE REVISED ESTIMATE OF REVENUE FOR 1977/78 AT $9,235 MILLION, MR. HADDON-CAVE NOTED, EXCEEDS THE ORIGINAL ESTIMATE OF $8,275 MILLION BY 960 MILLION, OR 12 PER CENT.

+RECURRENT REVENUE IS UP BY A NET $735 MILLION, OR BY 10 PER CENT, ON THE ORIGINAL ESTIMATE.

+NO LESS THAN $449 MILLION OF THIS EXCESS IS DUE TO MY UNDER-ESTIMATING THE MARKED EFFECT OF THE SHARP RECOVERY IN 1976 ON EARNINGS AND PROFITS TAXES AND THE GROWING EFFICIENCY

OF THE INLAND REVENUE DEPARTMENT AND BETS AND SWEEPS TAXES

YIELDED 70 MILLION OR 25 PER CENT, MORE THAN THE ORIGINAL ESTIMATE,+ HE EXPLAINED.

IN ADDITION, CAPITAL REVENUE IS UP BY $225 MILLION, OR 24 PER CENT, ON THE ORIGINAL ESTIMATE AS PREMIA FROM LAND TRANSACTIONS HAVE YIELDED $199 MILLION MORE THAN EXPECTED.

THE INCREASE WAS DUE TO A LARGER NUMBER OF MODIFICATIONS AND RE-GRANTS, HIGHER LAND PRICES AND A PRONOUNCED TENDENCY

FOR PREMIA TO BE PAID IN LUMP SUM'S RATHER THAN EY ANNUAL INSTALMENTS.

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ON EXPENDITURE, KR. HADDON-CAVE EXPLAINED THAT THERE IS A ..ET OVER-SPENDING BUT ONLY OF 12 MILLION ON RECURRENT ACCOUNT DESPITE THE 1977 CIVIL SERVICE SALARIES REVISION WHICH COST $260 MILLION.

/THIS AS