14-OCT-1992 11:37
FB GS
+ 852 868 5279
P.23
I
2
Paper 5 (12 of 6)
5.
In certain years the lumpiness of our capital expenditure may take us temporarily over our
our guidelines. This is permitted provided that, over a period, the overall growth rate in public expenditure remains in line with the trend growth rate of GDP.
In this way our expenditure programmes can be sensibly managed without suffering unduly from the effects of a stop-go cycle.
6.
other guidelines which have been adopted for
7.
planning our budgetary strategy are -
(a) as a general aim, over ર period of time, a
modest cash surplus is planned So that our
fiscal reserves are maintained at a level
adequate to meet known commitments and to
provide a cushion against future uncertainties;
and
(b)
a broad target of at least half of the capital expenditure programme is funded from recurrent sources, with the rest being made up by capital receipts.
The Medium Range Forecast
8.
The key planning tool which enables us to test
options in relation to both expenditure and revenue against our budgetary guidelines is the Medium Range Forecast (MRF). The MRF covers a forecast period of five
years, beginning in the current financial year.
produces projections of expenditure and revenue based on our forecasts/assumptions about
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