XN000022-1979-02-28 — Page 12

10

WEDNESDAY, FEBRUARY 28, 1979

$1,434 MILLION SURPLUS BUDGETTED FOR 1979-80

****

THE FINANCIAL SECRETARY, THE HON. PHILIP HADDON-CAVE, HAS BUDGETTED A SURPLUS OF $1,434 MILLION ON THE GENERAL REVENUE ACCOUNT FOR THE COMING FINANCIAL YEAR.

MAKING THE FORECAST IN THE LEGISLATIVE COUNCIL TODAY (WEDNESDAY), THE FINANCIAL SECRETARY SAID THE SURPLUS WAS THE DIFFERENCE BETWEEN HIS ESTIMATE OF REVENUE OF $13,888 MILLION SHOWN IN THE REVENUE ESTIMATES AND THE DRAFT ESTIMATES OF EXPENDITURE OF $12,454 MILLION.

0

MANAGEMENT OF PUBLIC FINANCES

****

THE TOTAL EFFECT OF BUDGET GUIDELINE RATIOS IS THAT A BALANCE SHOULD BE ACHIEVED BETWEEN REVENUE AND EXPENDITURE, ALLOWING SURPLUSES TO ACCRUE WHEN THE ECONOMY IS GROWING FASTER AND REVENUES FLUSHING AND NOT SEEKING TO ELIMINATE DEFICITS THAT ARISE FROM A TEMPORARY SLOWDOWN IN THE ECONOMIC GROWTH RATE.

THIS WAS STATED BY THE FINANCIAL SECRETARY, THE HON. PHILIP HADDON-CAVE, WHEN HE RESTATED THE BUDGET GUIDELINES IN HIS BUDGET SPEECH TODAY (WEDNESDAY).

+IN OTHER WORDS, HE SAID, IN THEORY, THE IMPACT OF GENERAL REVENUE ACCOUNT TRANSACTIONS ON THE GROWTH OF THE MONEY SUPPLY IS, ON AVERAGE, NEUTRAL (AFTER MAKING DUE ALLOWANCE FOR ANY NECESSARY ADDITIONS TO OUR FISCAL RESERVES IN LINE WITH THE GROWTH OF EXPENDITURE AND OUR CONTINGENT LIABILITIES).+

*BUT THIS IS NOT NECESSARILY TRUE OF THE TRANSACTIONS OF THE PUBLIC SECTOR AS A WHOLE,+ HE ADDED.

THE FINANCIAL SECRETARY SAID THE GENERAL OBJECTIVES OF BUDGETARY POLICY WERE

* TO IMPLEMENT GOVERNMENT POLICIES AND PROGRAMMES-

*

*

TO ENSURE THAT THE REQUIRED REVENUE IS RAISED AS EQUITABLY AS POSSIBLY AS BETWEEN PARTICULAR CLASSES AND GROUPS OF TAXPAYERS-

TO MINIMISE ANY ADVERSE EFFECTS OF PUBLIC EXPENDITURE AND OF THE FISCAL SYSTEM ON THE INTERNAL COST/PRICE STRUCTURE OF THE ECONOMY, ON THE SUPPLY OF HUMAN EFFORT AND ON PRIVATE INVESTMENT DECISIONS-

* TO MANAGE THE PUBLIC FINANCES GENERALLY SO AS TO MINIMISE THE

EXTENT TO WHICH THE MONETARY ENVIRONMENT IS DISTURBED-

* EXCEPT WHEN AN OBJECTIVE MUST BE TO INFLUENCE THE GROWTH

RATE OF TOTAL FINAL DEMAND.

/OBVIOUSLY,