XN000022-1987-04-01 — Page 7

WEDNESDAY, APRIL 1, 1987

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RECURRENT EXPENDITURE CONTROL VITAL

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THE CONTROL OF RECURRENT EXPENDITURE IS THE KEY TO ENSURING THAT TOTAL PUBLIC EXPENDITURE DOES NOT GROW FASTER THAN THE ECONOMY CAN AFFORD, THE FINANCIAL SECRETARY, THE HON PIERS JACOBS, TOLD THE LEGISLATIVE COUNCIL TODAY (WEDNESDAY).

WINDING UP THE RESUMED DEBATE ON THE APPROPRIATION BILL 1987, MR JACOBS ASSURED MEMBERS THAT THIS WAS SOMETHING TO WHICH THE GOVERNMENT PAID CLOSE ATTENTION.

MR JACOBS SAID HE SHARED THE CONCERN EXPRESSED REGARDING THE IMPORTANCE OF CONTROLLING THE RECURRENT EXPENDITURE ON STAFF, DEPARTMENTAL OPERATING COSTS AND SO ON.

HE POINTED OUT THAT UNLIKE CAPITAL EXPENDITURE, RECURRENT EXPENDITURE TENDED TO BE CUMULATIVE AND ITS UPWARD TREND WAS POTENTIALLY MORE INEXORABLE.

ON THE TREATMENT OF THE MASS TRANSIT RAILWAY CORPORATION AND THE KOWLOON-CANTON RAILWAY CORPORATION IN THE PUBLIC ACCOUNTS, MR JACOBS NOTED THAT THERE WERE DIFFERENT DEFINITIONS OF THE PUBLIC SECTOR WHICH WERE NEEDED FOR DIFFERENT PURPOSES.

BUT HE SAID FOR GDP CALCULATIONS, THERE WAS AN INTERNATIONAL DEFINITION OF PUBLIC EXPENDITURE, WHICH WE MUST FOLLOW.

+AT THE SAME TIME, WE MUST NOT LOSE SIGHT OF THOSE ASPECTS OF THE PUBLIC SECTOR OVER WHICH THE GOVERNMENT HAS A DIRECT BUDGETARY INFLUENCE= THIS IS WHAT WE CURRENTLY TRY TO REFLECT IN THE CONSOLIDATED ACCOUNT,+ HE SAID.

MR JACOBS SAID THAT THE CONCLUSION WAS THAT IT WAS LESS IMPORTANT TO FIND A SINGLE STATISTIC THAN IT WAS TO BE CLEAR ABOUT WHAT EACH STATISTIC MEANT AND TO APPLY IT CONSISTENTLY AND IN THE CORRECT CONTEXT.

+A STEP WE HAVE TAKEN THIS YEAR IS TO SET OUT IN THE APPENDICES TO THE BUDGET SPEECH AN INDICATION OF HOW THE CONSOLIDATED ACCOUNT IS BUILT UP AND ITS RECONCILIATION WITH THE GDP MEASURE OF THE PUBLIC SECTOR.

+WE WILL BE GIVING FURTHER CONSIDERATION TO THE DEVELOPMENT OF THIS SECTION OF THE APPENDICES,+ HE SAID.

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