EXPENDITURE POLICY

Operating revenue in FY98 is expected to grow by 3.8% in FY98, lower than the average growth rate of 6.7% over the past three years. This is due to the effects of lower economic growth and the follow through of tax cuts introduced in previous years.

Notwithstanding the slower increase in revenues, our revenue base remains robust and a deficit budget is not envisaged. Adequate funds will be available to maintain, and even increase, where necessary, expenditures needed to support long term growth and future competitiveness. As mentioned earlier, this will mainly be in the areas of education, economic infrastructure and defence. However, because of the considerable uncertainties which continue to overhang the region, we will exercise fiscal restraint in other non-crucial areas of expenditure. The FY98 Budget Estimates have been prepared on this basis.