∞
these
projects.
The Government,
upon the undertaking of
however, fully recognises the continuing importance of prudent
management of public finances. This continues to be based on
the target of keeping overall public expenditure growth over a period broadly in line with the growth of Gross Domestic
Product.
decision to build a new airport has not caused
this strategy to be changed. But we must recognise that inevitably capital expenditure will peak during the three or
four years leading up to the actual opening of the airport,
a temporary departure from our
The
and this would cause
guidelines.
18. The Government will continue to exercise a tight control
on public sector expenditure. This is needed even without a decision to build the new airport. The projected lower growth
in the economy and the prevailing level of inflation would in
any event require us to contain the increase in public
expenditure more tightly. Here, a distinction between
recurrent and capital expenditure must be drawn. The prime
need, even without the decision to build the airport, is to
keep recurrent expenditure growth to a reasonable level. This
means controlling the size of the civil service, and
increasing productivity, although it will nevertheless still
be possible to make provision for new or improved services,
partly by carrying out some existing activities cost-effectively.
more
CONCLUSION
19. In sum, with careful financial management, the major
spending on the key airport projects can be managed whilst
still keeping growth of public expenditure to a reasonable
level and giving the HKSAR Government a healthy financial position in 1997.
Finance Branch
Government Secretariat
29 November 1990
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