XN000022-1983-02-23 — Page 15

WEDNESDAY, FEBRUARY 23, 1983

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FS BUDGETS A DEFICIT OF $3.2 BILLION

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THE FINANCIAL SECRETARY, THE HON JOHN BREMRIDGE, PROPOSED TO SPEND $35 437 MILLION IN 1983/84 BUT HE EXPECTED REVENUE INCOME OF $29 294 MILLION.

HE TOLD THE LEGISLATIVE COUNCIL TODAY (WEDNESDAY) HOWEVER THAT THE PROJECTED DEFICIT BUDGET OF $6 143 MILLION WOULD BE REDUCED TO $3 167 MILLION THROUGH INCREASED TAXATION.

MR BREMRIDGE ALSO SAID HE MAY LATER CONSIDER A MODERATE DEGREE OF GOVERNMENT BORROWING IF DEFICITS OF A SIZE WHICH PRUDENT USE OF THE RESERVES PLUS A FURTHER SLOWDOWN IN EXPENDITURE AND INCREASES IN TAXATION COULD NOT BE REASONABLY ELIMINATED.

+ IT MAY BE OPPORTUNE THIS TIME NEXT YEAR TO CONSIDER SUCH AN APPROACH TO PRUDENT BORROWING. I DO NOT CONSIDER THAT IT IS YET NECESSARY, FOR WE CAN AT THIS JUNCTURE BALANCE TWO BAD YEARS WITH THE FRUITS OF THE PAST GOOD YEARS, HE SAID.

HE SAID IT WAS STILL NOT APPRECIATED HOW RECENT HAD BEEN THE GROWTH OF GOVERNMENT CAPITAL REVENUE REFLECTING LARGELY LAND SALES AT AUCTION OR BY TENDER -- CAPITAL REVENUE FROM LAND PREMIA DID NOT EXCEED $2 BILLION UNTIL AS RECENTLY AS 1978-79.

+THEREAFTER THERE WAS A RAPID INCREASE AS THE GOVERNMENT ENSURED THAT A PROPER SHARE OF THE UNPRECEDENTED ESCALATION IN LAND VALUES WAS TRANSFERRED TO THE PUBLIC PURSE, HE SAID.

AS A RESULT OF JUST A FEW UNUSUAL YEARS, WHICH SEEMED UNLIKELY TO BE REPEATED, FISCAL SURPLUSES OR RESERVES ROSE TO $22 BILLION AND FREE RESERVES TO $16 BILLION.

+ONLY A FOOL WOULD RISK RUNNING THESE DOWN TOO LOW AS A RESULT OF SOFT BUDGETARY POLICIES; BUT CLEARLY BEFORE WE NEED TO CONSIDER OUTSIDE BORROWING, IT IS POSSIBLE AND INDEED SENSIBLE TO MAKE USE OF PART OF OUR WINDFALL SAVINGS FOR TWO YEARS ANYWAY, HE SAID.

BUT IN THE SHORT TERM HE INTENDED TO CONFRONT BUDGETARY DEFICITS BY A BALANCED COMBINATION OF USE OF FISCAL RESERVES, INCREASED TAXATION AND MORE TIGHTLY RESTRAINED PUBLIC SECTOR EXPENDITURE,

+CLEARLY IF THE WORLD ECONOMIC SCENE DOES NOT IMPROVE IN 1983 WE SHALL NEED TO RESTRAIN FURTHER OUR EXPENDITURE IN 1984-85, BUT I DO NOT BELIEVE THAT AT PRESENT IT IS POSSIBLE TO FORETELL WHAT WILL HAPPEN WITH ANY ACCURACY, + HE SAID.

MR BREMRIDGE SAID A POTENTIAL DEFICIT OF $6.2 BILLION WAS CLEARLY INTOLERABLE IF REPEATED IN ONE SUBSEQUENT YEAR THE FREE FISCAL RESERVES WOULD BE GONE.

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/HE SAID ...........