TNAG-1641-FCO40-2288-Budget-of-Hong-Kong-1987 — Page 186

4.2.87

ESTIMATES 1987-88

SECRET

36

70.

Against this background, I now present the

draft estimates of expenditure, the revenue estimates and

my revenue proposals for 1987-88.

General Revenue Account Draft Estimates of Expenditure

71.

We have achieved our present position through

a cautious approach to expenditure growth. If we are to

maintain a satisfactory budgetary position, we must

contain expenditure growth to within the planning

assumption of a 5 1/2% average annual growth rate in the

economy. I aim to hold public expenditure a little below

this figure in order to allow room for unforeseen events,

and thus my estimates accommodate an overall expenditure

growth rate of 4.9% in real terms. This growth rate is

just under 1% more than that for 1986-87.

72.

I recognize that in setting the limits to

public expenditure I must have regard to a pent up demand

for services following a period of restraint. But I do

not believe that expenditure should be allowed to rise

automatically.

It remains vital that all new expenditure

SECRET