XN000022-1986-02-26 — Page 44

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WELNESDAY, FEBRUARY 26, 1986

SIR JOHN SAID THAT ON MARCH 31 THIS YEAR, THE BALANCES IN THE VARIOUS FUNDS WOULD AMOUNT TO SOME $10 BILLION. THE IR PURPOSE WAS TO SMOOTH OUT THE OFTEN UNEVEN ANNUAL CASH FLOW IN AND OUT OF THE FUNDS, AND TO PROVIDE FIRM BACKING FOR LONG-TERM CAPITAL COMMITMENTS.

+THE_MAGNITUDE OF THIS FIGURE, WHICH IS OFTEN OVERLOOKED, MUST BE RELATED TO THE OUTSTANDING COMMITMENTS FOR PROJECTS WHICH WILL HAVE ALREADY STARTED BY APRIL 1, 1986, + SIR JOHN SAID.

+FOR THE CAPITAL WORKS RESERVE FUND, THE DEVELOPMENT LOAN FUND, THE HOME OWNERSHIP FUND, AND THE MASS TRANSIT FUND, THESE COMMITMENTS ARE IN EXCESS OF $26.5 BILLION. THIS FIGURE WILL INCREASE TO WELL OVER $30 BILLION AS NEW PROJECTS ARE STARTED DURING THE COMING FINANCIAL YEAR.+

LATEST FIGURES SHOW $98M SURPLUS

***

LATEST FORECASTS INDICATED A SURPLUS ON GENERAL REVENUE ACCOUNT FOR 1985-86 OF $98 MILLION COMPARED WITH A DEFICIT OF $961 MILLION IN THE PRINTED ESTIMATES, FINANCIAL SECRETARY, SIR JOHN BREMRIDGE, SAID IN HIS BUDGET SPEECH.

SIR JOHN SAID THE $961 MILLION DEFICIT ESTIMATE

WAS A CONTINUED AND DELIBERATELLY PLANNED DOWNWARD TREND FROM DEFICITS OF $3.5 BILLION IN 1982-83, $3 BILLION IN 1983-84, AND $1.6 BILLION IN 1984-85.

REVIEWING THE ESTIMATES FOR 1985-86, SIR JOHN SAID THAT CAPITAL REVENUE HAD INCREASED BECAUSE OF HIGHER LAND PRICES, BECAUSE OF A NUMBER OF LAND SALES CONCLUDED BEFORE THE SINO-BRITISH JOINT DECLARATION REQUIRING SHARING CAME INTO EFFECT, BECAUSE OF THE USE OF CASH INSTEAD OF LETTERS B, AND TO THE KCRC'S EARLY REPAYMENT OF $500 MILLION OUT OF A DEBT OF $1 BILL ION.

+WE HAVE LARGELY TUCKED THIS WINDFALL REVENUE INTO RESERVES TO HELP FINANCE THE $1.5 BILLION EQUITY INJECTION INTO MTRC (WHICH WAS NOT ENVISAGED) AND TO PROVIDE FOR THE FURTHER INJECTION OF $1 BILLION DUE IN 1987-88,+ SIR JOHN SAID.

APART FROM THESE EXCEPTIONAL MATTERS, SIR JOHN SAID, THERE HAD BEEN AN UNDERSPENDING OF 1.2 PER CENT ON RECURRENT ACCOUNT AND A GAIN OF 1.6 PER CENT IN RECURRENT REVENUE. THE CONTROL OF EXPENDITURE BUDGETS BY CASH LIMITS HAD CONTINUED VERY SUCCESSFULLY.

/SIR JOHN ..............