XN000022-1983-02-23 — Page 13

WEDNESDAY, FEBRUARY 23, 1983

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+TO THE EXTENT THAT SIGNIFICANT CHANGES OCCUR IN THE SUBSEQUENT MONTHS OF THE FINANCIAL YEAR WHICH WERE NOT FORESEEN, THE REVISED ESTIMATE WILL BE INACCURATE.+

IN ORDER BETTER TO MEET THIS PROBLEM, MR BREMRIDGE PROPOSED TO EXAMINE THE FACTORS INVOLVED IN DEFERRING BUDGET DAY IN FUTURE TO THE LAST WEDNESDAY IN MARCH.

+THIS, COUPLED WITH IMPROVED FACILITIES FOR THE PRINTER, SHOULD ALLOW A LATER CUT-OFF DATE TO BE FIXED, SAY AT THE END OF DECEMBER, AND SO IMPROVE THE ACCURACY OF THE FORWARD PLANNING PROCESS. IN BRIEF A MORE RELIABLE BASE WILL BE AVAILABLE, HE SAID.

AS AN EXAMPLE OF THE DIFFICULTIES THAT NOW ARISE AS GOVERNMENT BUDGETS GROW WITH THE GROWTH OF HONG KONG, MR BREMRIDGE SAID LAST YEAR THE BUDGET FOR 1982-83 ENVISAGED A SIGNIFICANT SLOWING DOWN IN THE GROWTH RATE OF PUBLIC SECTOR EXPENDITURE.

+ON THE BASIS OF THE REVISED ESTIMATE TAKEN IN NOVEMBER 1981 OF CONSOLIDATED ACCOUNT EXPENDITURE FOR 1981-82, THE BUDGET FOR 1982-83 PROVIDED FOR A SLOWING DOWN OF THE GROWTH RATE IN REAL TERMS TO 10.7 PER CENT EXCLUDING ANY CIVIL SERVICE PAY ADJUSTMENT.+

IN THE EVENT, HE SAID, ACTUAL CONSOLIDATED ACCOUNT EXPENDITURE IN 1981-82 HAS PROVED CONSIDERABLY LOWER THAN THE REVISED ESTIMATE THEN USED, LARGELY BECAUSE THE HOUSING AUTHORITY SPENT MUCH LESS THAN EXPECTED.

+ THE ACTUAL GROWTH RATE OF PUBLIC SECTOR EXPENDITURE IN 1981-82 WAS THEREFORE LOWER THAN OUR CALCULATIONS WERE BASED ON, AND IN CONSEQUENCE THE 1982-83 BUDGET MADE PROVISION MATHEMATICALLY FOR A HIGHER GROWTH RATE THAN INTENDED, WHICH I NOW EXPECT TO BE ABOUT 17 PER CENT IN REAL TERMS (PAY ADJUSTMENT INCLUDED), + MR BREMRIDGE SAID.

+! FIND THIS OUTCOME QUITE INFURIATING, HE ADDED.

EARLIER, THE FINANCIAL SECRETARY SAID HE SHARED WHAT HE BELIEVED TO BE A CONSENSUS WITH MEMBERS OF THE COUNCIL THAT IT WAS OF MAXIMUM IMPORTANCE THAT PUBLIC SECTOR EXPENDITURE SHOULD BE HELD IN CHECK.

HE SAID THE GROWTH RATE IN RECENT YEARS HAD BEEN HIGHLY ENCOURAGED BY BUOYANT REVENUE, BUT THE SCENE HAD CHANGED.

+1 REPEAT WHAT I SAID LAST YEAR THAT IN GENERAL TERMS WE MUST GET THE GROWTH RATE IN REAL TERMS IN PUBLIC SECTOR EXPENDITURE ON CONSOLIDATED ACCOUNT DOWN TO THE GROWTH RATE IN GDP- AND IN SOME YEARS BELOW, IF BUDGETARY REQUIREMENTS INDICATE.+

ON THE BASIS OF THE BUDGET PRESENTED TODAY, MR BREMRIDGE SAID TOTAL PUBLIC SECTOR EXPENDITURE IN 1983-84 REPRÉSENTED A GROWTH RATE OF ABOUT THREE PER CENT IN REAL TERMS, WHICH WAS BELOW THE EXPECTED GROWTH RATE OF THE GDP AT FOUR PER CENT AND WAS A SHARP SLOWING DOWN FROM THE PREVIOUS YEAR.

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