XN000022-1982-03-24 — Page 10

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WEDNESDAY, MARCH 24, 1982

* INSTEAD OF AN INTENDED EASING BACK IN THE GROWTH RATE OF PUBLIC EXPENDITURE IN REAL TERMS IN 1981-82, THERE WAS A SHARP INCREASE OVER THE YEAR'S APPROVED

ESTIMATES; AND

* THE RELATIVE SIZE OF THE PUBLIC SECTOR IS

NOW HALF AS LARGE AGAIN AS IT WAS FIVE YEARS AGO. AND YET IT IS DUE TO GO EVEN HIGHER IN 1982-83 SINCE THE GROWTH RATE OF PUBLIC EXPENDITURE IS AGAIN FORECAST TO EXCEED THE GROWTH RATE OF THE ECONOMY.

MISS DUNN SAID THAT IT WOULD NOT DO AT ALL FOR THE GOVERNMENT TO RESPOND BY ASKING UNOFFICIALS TO MAKE SPECIFIC SUGGESTIONS AS TO THE AREAS WHERE SAVINGS IN PUBLIC EXPENDITURE COULD BE MADE.

+ IT IS THE GOVERNMENT'S RESPONSIBILITY TO MANAGE THE PUBLIC FINANCES AND SO IT IS THE GOVERNMENT'S RESPONSIBILITY TO DETERMINE EXPENDITURE LIMITS AND PRIORITIES, SHE STRESSED.

SHE ALSO THOUGHT IT WAS BOTH UNFAIR AND MISLEADING TO ARGUE, AS THE THEN CHIEF SECRETARY DID DURING THE DEBATE ON THE GOVERNOR'S ADDRESS LAST NOVEMBER, THAT APPLICATIONS FOR SUPPLEMENTARY PROVISION TO COVER EXPECTED EXCESSES IN EXPENDITURE WERE SUBMITTED TO AND APPROVED BY THE FINANCE COMMITTEE OF THE LEGISLATIVE COUNCIL.

SHE SAID: THIS IS TRUE AND EACH APPLICATION MAY BE JUSTIFIED IN ITS OWN RIGHT, BUT NO ATTEMPT IS MADE TO ASSESS THE CUMULATIVE EFFECT OF ALL APPLICATIONS ON TOTAL EXPENDITURE OVER AND ABOVE THE APPROVED ESTIMATES OR OF THEIR ECONOMIC IMPLICATIONS.

+MEMBERS OF FINANCE COMMITTEE HAVE NO OPTION BUT TO ASSUME THAT THE GOVERNMENT, IN PUTTING FORWARD THESE APPLICATIONS, HAS ALREADY ASSESSED THEIR FINANCIAL AND ECONOMIC IMPLICATIONS AND TO ASSUME, SHOULD THEY BE APPROVED, THAT THIS WILL NOT MEAN, AT THE END OF THE DAY, THAT THE PUBLIC UNDERTAKINGS AND ASSURANCES GIVEN TO THIS COUNCIL ABOUT THE MANAGEMENT OF THE PUBLIC FINANCES WILL BE BREACHED.+

MISS DUNN SUGGESTED THAT ALL FUTURE APPLICATIONS FOR SUPPLEMENTARY PROVISION, UNLESS OFFSET BY EQUIVALENT SAVINGS ELSEWHERE, SHOULD BE ACCOMPANIED BY AN ASSESSMENT OF THEIR IMPLICATIONS FOR THE GOVERNMENT'S BUDGETARY STRATEGY IN BOTH FINANCIAL AND ECONOMIC TERMS, AND SHOULD ONLY BE APPROVED BY FINANCE COMMITTEE IF THAT ASSESSMENT IS FOUND TO BE ACCEPTABLE.

MISS DUNN ALSO EXPRESSED CONCERN OVER THE DECLINE IN THE PROPORTION OF TOTAL EXPENDITURE FINANCED BY RECURRENT REVENUE.

SHE TOLD THE COUNCIL THAT THE FINANCING OF THE CAPITAL EXPENDITURE IN THE LAST FIVE YEARS HAD BEEN MUCH LESS DEPENDENT ON RECURRENT REVENUE THAN IN THE PAST.

QUOTING STATISTICS, SHE POINTED OUT THAT CAPITAL REVENUE IN THE FIVE YEARS ENDING 1976-77 FINANCED, ON AVERAGE, ABOUT 40 PER CENT OF CAPITAL EXPENDITURE WHILE THE BALANCED BEING FINANCED BY RECURRENT REVENUE.

/IN THE THREE

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