XN000022-1981-02-25 — Page 10

WEDNESDAY, FEBRUARY 25, 1981

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FS1 $7 881 MILLION SURPLUS FOR 1981-82

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THE FINANCIAL SECRETARY, THE HON SIR PHILIP HADDON-CAVE, HAS BUDGETTED FOR A SURPLUS OF $7 881 MILLION FOR THE 1981-82 FINANCIAL YEAR.

THE SURPLUS WOULD BE DERIVED FROM AN ESTIMATED TOTAL REVENUE OF $32 524 MILLION AS AGAINST AN ESTIMATED TOTAL EXPENDITURE OF $24 643 MILLION, HE SAID.

ALSO TAKEN INTO ACCOUNT WAS THE COST TO THE REVENUE OF THE FIVE TAX CONCESSIONS, WHICH WAS $1 250 MILLION.

HE SAID THE ESTIMATED SURPLUS +REPRESENTS 24 PER CENT OF REVENUE AS NOW ESTIMATED AND, WHILST IT IS ABOUT TWICE THE RELATIVE SIZE OF THE SURPLUS IN THE FIRST THREE YEARS OF THE POST-RECESSION PERIOD. IT IS BELOW THE RELATIVE SIZE OF THE EXPECTED SURPLUS FOR 1980-81 OF 32 PER CENT.

+THE REASON IS, OF COURSE, THAT THE INCREASE IN EXPENDITURE IN 1981-82 ON 1980-81 IS 25 PER CENT, BUT THE INCREASE IN REVENUE IS ONLY 12 PER CENT. COMPARED WITH THE INCREASE IN EXPENDITURE IN 1980-81 ON 1979-80 OF 42 PER CENT AND THE INCREASE IN REVENUE OF 73 PER CENT, SIR PHILIP SAID.

HE ADDED: +SHOULD THIS BUDGETTED FOR SURPLUS MATERIAL ISE OUR 'FREE' FISCAL RESERVES AT APRIL 1, 1982 WILL BE OF THE ORDER OF $18 100 MILLION.+

1980-81 SURPLUS EXPECTED TO BE ABOUT $6 000 M

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THE FINANCIAL SECRETARY, THE HON SIR PHILIP HADDON-CAVE, SAID TODAY THE ACTUAL SURPLUS FOR THE CURRENT FINANCIAL YEAR WOULD BE ABOUT $6 000 MILLION.

THIS WOULD PROBABLY BE THE FIGURE, HE SAID, ALTHOUGH THE REVISED ESTIMATES OF REVENUE AND EXPENDITURE FOR 1980-81 AT $29 000 MILLION AND $19 677 MILLION RESPECTIVELY INDICATED A SURPLUS OF $9 323 MILLION.

HE GAVE TWO REASONS FOR THE DIFFERENCE: FIRST, BECAUSE OF VARIOUS ADJUSTMENTS TO BOTH REVENUE AND EXPENDITURE MADE FOR ANALYTICAL REASONS AMOUNTING TO A NET ADDITION TO EXPENDITURE OF $3 815 MILLION, INCLUDING A TRANSFER OF $3 500 MILLION TO THE MASS TRANSIT FUND- AND SECONDLY, BECAUSE THE REVISED ESTIMATES MAY OVERSTATE EXPENDITURE AND UNDERSTATE REVENUE BY RELATIVELY SMALL MARGINS.

THE SURPLUS OF $9 323 MILLION WOULD BE THE HIGHEST ON RECORD IN BOTH ABSOLUTE AND RELATIVE TERMS (1.E. AS A PERCENTAGE OF TOTAL REVENUE), HE SAID.

+FOR THE FOURTH YEAR RUNNING, THIS LARGER THAN BUDGETTED FOR SURPLUS -- $9 323 MILLION RATHER THAN $2 904 MILLION — IS DUE TO A FLUSH OF REVENUE RATHER THAN A FAILURE OF EXPENDITURE.

+ IN ADDITION, FOR THE FIRST TIME EVER, THERE IS A SURPLUS ON CAPITAL ACCOUNT, AND OF NO LESS THAN $2 899 MILLION AS OPPOSED TO A BUDGETTED FOR DEFICIT OF $701 MILLION, HE SAID.

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