14.
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So that Members and the public can see an alternative picture, I estimate that the addition of one percentage point to the present standard rate of 17% would yield $165 million in the first year and $290 million in a full year.
15.
Similarly an addition of one percentage point to the present corporate rate of 18.5% would yield $200 million in the first year and $430 million in a full year.
16.
a
I believe that in our particular circumstances planned deficit, that is to say a drawdown from the free fiscal reserves, of $1 billion for 1985-86 is acceptable. This is of course a subjective view. Certainly I would prefer no deficit at all. Nevertheless the managed downward trend is pronounced and visible to all. If Members in the forthcoming debate seek a lower deficit or greater tax concessions or new programmes the simple mathematics of alternative direct taxation increases
should at least be known.
17.
Let no
one doubt that the excellent civil service has
played and is playing its full, painful part. Stabilisation of the establishment is clearly an essential component of control of expenditure. It is, however, particularly difficult when per
capita GDP is rising and public aspirations demand more services, for which new staff has to be provided. Productivity has obviously increased and is still increasing.
18.
If my expenditure proposals are accepted the relative size of the public sector will have dropped by no less than 3.1 percentage points, that is to say by 16%, since 1982-83 (3). This is better than expected and of great importance. Value for money has become a tough criterion. I regard frugality as an essential component of good government as it is of good business. Moreover in a deficit situation taxpayers pressed for higher Government revenue have the right to expect parallel pressure on Government expenditure: there clearly has been.
(3) See paragraph 45 below.
G.F. 316
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