XN000022-1992-10-28 — Page 8

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WEDNESDAY, OCTOBER 28, 1992

FS EXPLAINS FUNDING STRATEGY

THE FINANCIAL SECRETARY, THE HON HAMISH MACLEOD, TODAY (WEDNESDAY) ASSURED THE LEGISLATIVE COUNCIL THAT THE VARIOUS PROPOSALS TO INCREASE SERVICES FOR THE COMMUNITY OUTLINED POLICY ADDRESS WERE AFFORDABLE.

IN THE

GOVERNOR'S

REPLYING TO MEMBERS

+

COMMENTS ON THE POLICY ADDRESS, HE SAID THE STRONG ECONOMIC GROWTH IN PARTICULAR HAD ENABLED THE GOVERNMENT TO PLAN WITH CONFIDENCE FOR PUBLIC SECTOR SPENDING TO INCREASE IN REAL TERMS BY FIVE PER CENT A YEAR.

IN ADDITION, HE SAID, THE GOVERNMENT HAD ALSO SEIZED THE OPPORTUNITY POSED BY THE PROSPECT OF A WINDFALL" SURPLUS OF AT LEAST $6 BILLION TO ADVANCE FUNDING IN SOME KEY AREAS, NOTABLY SOCIAL WELFARE AND THE ENVIRONMENT.

"OUR

MEDIUM RANGE FORECAST IS BASED ON AN INCREASE OF FIVE PER CENT IN EXPENDITURE AND SHOWS THAT IN CASH FLOW TERMS THESE PROPOSALS ARE CLEARLY AFFORDABLE WITHOUT ANY MAJOR CHANGES IN TAX OR OTHER REVENUE, AND WILL STILL LEAVE AN ADEQUATE CUSHION IN THE FORM OF OUR RESERVES, HE SAID.

17

COMMITTED

HOWEVER, HE REAFFIRMED THAT THE GOVERNMENT WAS AS AS EVER TO KEEPING PUBLIC EXPENDITURE GROWTH IN LINE WITH GROWTH IN THE ECONOMY.

MR MACLEOD REFUTED THE CLAIM THAT THERE WAS NOTHING NEW IN THE SPENDING PROPOSALS.

=

"WHAT WE HAVE NOW DONE WHICH IS NEW IS TO UNAMBIGUOUSLY COMMIT FUNDS FOR THE KEY POLICY AREAS NAMED IN THE ADDRESS.

"BUT WE HAVE ALSO GONE FURTHER THAN THIS, MOST NOTABLY IN THE AREA OF REHABILITATION, WHERE WE HAVE SUBSTANTIALLY ADVANCED THE TIMING FOR ACHIEVING KEY TARGETS,

++ HE SAID.

HE ALSO CLARIFIED THAT THE FIGURES IN THE POLICY ADDRESS CONCERNING THE INCREASE IN SPENDING OVER THE PERIOD ON SOCIAL SERVICES WOULD BE AN INCREASE IN REAL TERMS.

REFERRING ΤΟ SOME MEMBERS' COMMENTS THAT THE GOVERNOR'S SPEECH WAS NOTHING BUT A SHOPPING LIST OF ITEMS ON WHICH TO SPEND MONEY AND LACKING IN STRATEGY, HE SAID: "WHAT DISTINGUISHES THE SPEECH, SO FAR AS SPENDING PROPOSALS ARE CONCERNED, IS PRECISELY THAT IT TAKES A LONG VIEW ON MAJOR POLICIES, THAT IT LOOKS BEYOND THE NEXT FINANCIAL YEAR OVER THE WHOLE PERIOD TO 1997."

HE POINTED OUT THAT THE MAJOR PROPOSALS STEMMED FROM DETAILED CONSIDERATION AND ADVICE AND DISCUSSIONS CARRIED OUT IN ADVISORY COMMITTEES AND CONTAINED ALSO IN GREEN PAPERS AND WHITE PAPERS.

THE PRIORITIES REFLECTED IN THE SPEECH WERE BASED ON THOSE WHICH EMERGED FROM THE CONSULTATION EXERCISE WHICH HE CARRIED OUT IN JULY THIS YEAR WITH LEGCO MEMBERS ON EXPENDITURE PROPOSALS FOR THE NEXT BUDGET, MR MACLEOD ADDED.

/TURNING TO