XN000022-1992-03-05 — Page 12

11

THURSDAY, MARCH 5, 1992

FINANCIAL SECRETARY:

WELL THAT IS ACTUALLY WHAT IS MEANT BY THE RESERVES GOING DOWN FROM 99 OR THEREABOUTS TO AROUND 70 OVER A PERIOD. THE ONLY WAY YOU CAN REDUCE THE RESERVES IS ACTUALLY TO RUN DEFICIT BUDGETS, THAT IS HOW YOU REDUCE THE RESERVES. SO WHAT IT MEANS IS THAT ON THAT SCENARIO, WE WOULD HAVE A DEFICIT BUDGET AND WE WOULD DRAW ON THE RESERVES, THAT IS WHAT IT MEANS.

QUESTION:

USUALLY HAVE A DEFICIT BUDGET

FINANCIAL SECRETARY:

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BUT TRADITIONALLY WE DON'T

I MEAN IN THE LAST ABOUT 8 YEARS.

YES, THAT'S TRUE. AND IF YOU DON'T WANT ME TO HAVE A DEFICIT BUDGET, THEN WE'LL HAVE TO HAVE MORE TAXATION WHICH I AM NOT PROPOSING.

QUESTION:

IN YOUR MEDIUM-RANGE

FORECAST

HOW

FOR 1994-95 THE DEFICIT WILL REACH A PEAK AND MANY PEOPLE SPECULATE THAT A LOT OF LAND WILL BE PUT UP FOR AUCTION BY THE GOVERNMENT. DO YOU LOOK AT THAT?

FINANCIAL SECRETARY:

I MEAN THE FIRST POINT IS, I WOULD ADVISE, DON'T GET OVER-FIXATED ON THE EXACT FIGURES THESE ARE FORECASTS AND SOME OF THE FIGURES ARE NECESSARILY AVERAGES, AND I THINK I AM RIGHT IN SAYING THAT LAND REVENUE IS ONE. IT'S NOT A BUILD-UP OF ACTUAL SITES THAT WE EXPECT TO SELL IN A PARTICULAR YEAR, IT'S AN AVERAGE, IT'S A PROJECTION OF WHAT WE EXPECT THE PRICES TO BE, BASED ON OUR HISTORICAL EXPERIENCE AND THEN JUST AVERAGED OVER THE PERIOD.

SO THESE FIGURES WILL NOT BE - YOU KNOW, THE DIFFERENCE BETWEEN 9 OR 8 OR 7 IS NOT OF ENORMOUS SIGNIFICANCE. WHERE THERE WILL ВЕ THE PEAKS AND TROUGHS OF LAND SALES, I DON'T THINK I CAN POSSIBLY PREDICT, I'M AFRAID IF THAT WAS THE QUESTION.

QUESTION:

++

I WAS SURPRISED BY THE 10% INCREASE IN HYDRO-CARBON TAX, WOULDN'T A LOWER INCREASE HAVE BEEN BETTER IN THE BID TO FIGHT INFLATION?

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+

FINANCIAL SECRETARY:

THE PROBLEM, WHEN YOU LOOK AT CONCESSIONS, IS TO TRY AND MAKE SURE THAT THEY ARE ACTUALLY PASSED ON TO THE CONSUMER AND IT SEEMED TO US THAT THE BEST WAY OF ENSURING THAT WAS TO DO WHAT WE DID, THAT IS TO SAY TO FOCUS ON THE FRANCHISED BUSES. AND WE HAVE A MECHANISM AFTER ALL WE APPROVE, IN THE END, THE FARES

WE HAVE A MECHANISM THEREFORE FOR ENSURING THAT THE BENEFIT IS PASSED ON TO THE PUBLIC. THAT IS PROBABLY THE MAIN ANSWER.

THE MORE GENERAL POINT IS THAT WE ARE NOT MAKING REAL INCREASES IN ALL THOSE OTHER TAXES, INCLUDING THAT ONE, WE'RE ALMOST KEEPING UP WITH INFLATION YOU'LL NOTICE IT IS ACTUALLY A LITTLE BELOW INFLATION THAT IS ALSO A DELIBERATE CONTRIBUTION, AS IT ΤΟ KEEPING INFLATIONARY PRESSURES DOWN. BUT WE CAN'T LET THE ANNUAL REVISION OF DUTIES AND SO ON BEGIN TO FALL BEHIND INFLATION, IN OTHER WORDS, TO GO DOWN IN REAL TERMS TOO MUCH, ONLY IN A SELECTIVE WAY WE DO IT, AND THAT IS WHAT WE HAVE TRIED TO DO THIS TIME.

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BIT

WERE,

CAN

/QUESTION