XN000022-1992-04-01 — Page 5

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WEDNESDAY, APRIL 1, 1992

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"FAR FROM PLANNING A MASSIVE INCREASE IN THE RESERVES OVER FIVE

YEARS, WE EXPECT THEM TO FALL AS A PROPORTION OF THE GOVERNMENT'S ANNUAL SPENDING, THEY WILL DECLINE FROM 80% OF EXPENDITURE IN 1992-93 TO ABOUT 40% IN 1996-97," HE SAID.

MR MACLEOD SAID HE HAD DETECTED AN IMPORTANT MISUNDERSTANDING ABOUT THE ROLE OF THE FISCAL RESERVES, AND OF THE $71 BILLION FIGURE THE GOVERNMENT HAD FORECAST FOR 1996-97.

"IT IS A MISTAKE TO FOCUS UNDULY ON THE FIGURE WE HAVE FORECAST FOR THE END OF THE PLANNING PERIOD. WE NEED ADEQUATE FISCAL RESERVES SO THAT WE CAN DRAW ON THEM IF WE ENCOUNTER ADVERSE ECONOMIC AND FINANCIAL DEVELOPMENTS.

"IF WE ARE FORCED TO DRAW ON THEM, THEN OF COURSE THE RESERVES WILL BE CONSIDERABLY LESS THAN THE $71 BILLION WE EXPECT BY THE END OF THE

WE CURRENT PLANNING PERIOD. THE IMPORTANT POINT IS THAT

SHOULD HAVE AN ADEQUATE CUSHION THROUGHOUT THE NEXT FIVE YEARS, HE SAID.

"

MR MACLEOD SAID HE DID NOT REGARD THE FORECAST RESERVES AS IN ANY WAY EXCESSIVE.

HE POINTED OUT THAT THE GOVERNMENT WAS COMMITTED TO SET ASIDE $25 BILLION FOR THE FUTURE SAR GOVERNMENT IN 1997.

"WE ALSO HAVE TO ENSURE AN ADEQUATE CUSHION TO MEET FUTURE FLUCTUATIONS IN OUR ECONOMIC FORTUNES.

FORCED

"THE CUSHION IS OUR BEST GUARANTEE THAT WE WILL NOT BE ΤΟ CUT BACK ON FUNDING FOR OUR KEY PROGRAMMES IF WE ENCOUNTER UNEXPECTED ECONOMIC DIFFICULTIES," MR MACLEOD SAID.

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REAL IMPROVEMENTS IN GOVT PROGRAMME AREAS: FS

GOVERNMENT PROGRAMME

THERE ARE REAL IMPROVEMENTS IN SPECIFIC AREAS WHICH WILL BENEFIT THE WHOLE COMMUNITY, THE FINANCIAL SECRETARY, THE HON HAMISH MACLEOD, SAID TODAY (WEDNESDAY).

COUNCIL, MR

CONCLUDING THE BUDGET DEBATE AT THE LEGISLATIVE MACLEOD SAID EVEN WITH THE GOVERNMENT'S COMMITMENTS FOR THE AIRPORT CORE PROGRAMME, HE HAD BEEN ABLE TO PROVIDE FOR AN OVERALL INCREASE IN RECURRENT EXPENDITURE IN 1992-93 OF 15.4 PER CENT IN MONEY TERMS.

"IN

SPECIFIC PROGRAMME AREAS, THIS TRANSLATES INTO A FIVE PER CENT REAL INCREASE IN EXPENDITURE ON EDUCATION, FOUR PER CENT ON SOCIAL WELFARE AND NINE PER CENT ON HEALTH CARE.

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