Govt to review spending

Press, 9 January 1986, Page 4

Govt to review spending

PA Wellington The Government would examine closely public expenditure for the forthcoming year, said the Minister of Finance, Mr Douglas, yesterday. It would review large areas of public sector activity to see if savings or improvements could be made. Public sector spending had been rediiced from 41 per cent of gross domestic product in the last year of the National Government to about 38 per cent of G.D.P. in the current year.

“This is a creditable achievement but it will require considerable restraint to hold this gain,” Mr Douglas said. The Government was still uncovering financial commitments left by the “disasters” of the previous administration. It recently announced it

would take over $ll3B million of debt from the N.Z. Steel expansion project. The interest was $2 to $3 million a week that could not be spent on health, education, housing or in tax reductions, he said. Mr Douglas also said comments by the Leader of the Opposition, Mr McLay, on public expenditure control were amusing but not credible. He said he could not recall a concrete proposal for expenditure reduction from him. The only areas in which Mr McLay had been specific had been on expenditure increases. The cost of National Party promises last July was $6OO million, he said.

Officials were preparing updated costs and the figures were expected to be available in the next few days.