26.
Secondly, we must
distinguish between recurrent
This meang
and capital expenditure. The prime need, even without the
decision to build the airport, is to keep recurrent
expenditure growth
growth to a reasonable level.
controlling the size of the civil service, and increasing
productivity. To provide a little reassurance I should add
that it will
will nevertheless still be possible to make some
provision for new or improved services, partly by carrying
out some existing activities more cost-effectively.
27.
On the capital expenditure front it is, of course,
true that we are giving priority to airport core projects,
and that we will have to be particularly prudent over new
programmes with significant capital expenditure
implications. But it is important to keep this
this in
perspective. We have allowed for commitments in other
areas too, such as education, social services, the
environment, water supply and new town development.
Capital expenditure on non-airport programme areas is
projected to be a massive $140 billion at 1990 prices in
the period up to 1997.
28.
What does all this mean for our public finances
over the next six to seven years? Clearly we will, as
capital expenditure builds up and peaks over this period,
face a few years of budgetary deficits. This is tu be
expected, and is precisely one of the reasons why we have
built up such considerable reserves. Drawing on these
reserves to pay for infrastructural investments which will
allow the continued growth of our economy and the continued
prosperity of Hong Kong is to some extent inevitable.
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