|
Containing Expenditure Growth
137. The Working Group recommends that public expenditure be controlled at or around 20 per cent of GDP. It is a suitable level as it ensures that Government will not consume excessive social resources and that government expenditure will be kept at a level commensurate with government revenue. In fact, government revenue exceeded this level in only seven out of the past 40 financial years.
138. It is incumbent upon Government to strictly contain the growth of expenditure. When preparing annual budgets, Government would hold fast to the forecast nominal GDP growth rates over the medium term as planning ceilings for total government expenditure. We should uphold fiscal disciplines, and put in place a more vigorous internal control and monitoring mechanism for assessing and prioritising competing funding priorities with appropriate offsettings from different programmes.
139. Government departments and the public sector should conduct expenditure reviews and introduce efficiency measures with a view to doing more with less. In response to community needs, Government will continue to increase recurrent spending. But we must be wary that it is always easier to increase than to cut recurrent expenditure, and their cumulative financial impact cannot be ignored. All government departments should consider how best to consolidate their services and funding schemes, and phase out outdated and redundant items.
|
|