XN000022-1991-03-06 — Page 24

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WEDNESDAY, MARCH 6, 1991

"PART OF THIS IS DUE TO HIGHER COSTS BUT IT MAINLY REFLECTS THE CONTINUING EXPANSION OF THE PUBLIC WORKS PROGRAMME ON TRANSPORT, THE ENVIRONMENT, NEW TOWNS, HOSPITALS, IMPROVEMENTS TO KAI TAK AND VARIOUS OTHER PROJECTS," THE FINANCIAL SECRETARY SAID.

HE ADDED THAT EXPENDITURE FROM THE LOAN FUND AT $2.0 BILLION WOULD BE 47 PER CENT MORE THAN THE FIGURE FOR 1990-91.

HE SAID THIS INCREASE WAS ATTRIBUTABLE TO THE PROVISION OF INTEREST-BEARING REPAYABLE LOANS TO CIVIL SERVANTS TO ENCOURAGE AS MANY OF THEM AS POSSIBLE TO ACQUIRE THEIR OWN HOMES.

THE SAVINGS IN THE LONG TERM FROM THE REDUCED REQUIREMENTS FOR NON-DEPARTMENTAL QUARTERS WERE EXPECTED TO BE VERY SUBSTANTIAL INDEED.

ON GOVERNMENT RECURRENT EXPENDITURE IN 1991-92, HE SAID IT IS ESTIMATED TO INCREASE BY 6.5 PER CENT IN REAL TERMS OVER 1990–91, AND CAPITAL EXPENDITURE BY 22 PER CENT.

CENT.

TOTAL GOVERNMENT EXPENDITURE WOULD THUS INCREASE BY 10.6 PER

AFTER ALLOWING FOR EXPENDITURE BY THE HOUSING AUTHORITY AND THE URBAN AND REGIONAL COUNCILS, TOTAL PUBLIC EXPENDITURE WAS EXPECTED то BE ABOUT 8.2 PER CENT HIGHER IN REAL TERMS COMPARED WITH 1990-91, WITH RECURRENT EXPENDITURE GROWING BY 6.5 PER CENT AND CAPITAL EXPENDITURE BY 12 PER CENT.

"ON THE FACE OF IT THE RATE OF GROWTH IN RECURRENT FOR 1991-92 WOULD SEEM TO BE DECIDEDLY ON THE HIGH SIDE.

EXPENDITURE

"BUT THIS IS LARGELY BECAUSE OF EXPECTED UNDERSPENDING IN 1990- 91 AND THE DEFERMENT OF EXPENDITURE TO 1991-92.

"IF A COMPARISON WERE MADE OF THE 1991-92 ESTIMATE WITH THE ORIGINAL PRINTED ESTIMATE FOR 1990-91, IT WOULD SHOW THAT THE GROWTH OF RECURRENT EXPENDITURE WAS BELOW THE TREND GDP GROWTH RATE OF 5.5 PER CENT," SIR PIERS SAID.

THUS, HE SAID, THE GOVERNMENT COULD CLAIM A MEASURE OF SUCCESS IN CONTROLLING THE GROWTH IN STAFF NUMBERS AND IN REDUCING EXPENDITURE IN THOSE AREAS IDENTIFIED IN ITS ATTACK ON THE BASELINE.

"NEVERTHELESS, THE GROWTH RATE OF PUBLIC EXPENDITURE, IN PARTICULAR OF RECURRENT EXPENDITURE, OVER THE LAST TWO YEARS MUST GIVE US SOME CAUSE FOR CONCERN, SINCE IT HAS EXCEEDED THE TREND GROWTH IN GDP," HE SAID.

IN 1988-89, RECURRENT EXPENDITURE GREW IN REAL TERMS BY 6.3 PER CENT OVER THE PREVIOUS YEAR. IN 1989-90 THE GROWTH WAS 7.0 PER CENT.

"IN THE CURRENT YEAR WE ARE EXPECTING GROWTH TO BE ABOUT 6.8 PER CENT OVER ACTUAL EXPENDITURE FOR 1989-90, AND 6.5 PER CENT IN THE NEW FINANCIAL YEAR, SIR PIERS NOTED.

"

WHILST THIS LATEST TREND IS AN IMPROVEMENT, THE FINANCIAL SECRETARY SAID THE GOVERNMENT COULD NOT AFFORD TO RELAX ITS EFFORTS,

/"BUT LET