May indication of expenditure cuts

Press, 9 July 1986, Page 8

May indication of expenditure cuts

Wellington reporter The Government had some indication when it unveiled in May its package of expenditure cuts that still further savings would be needed. An Associate Minister of Finance, Mr Caygill confirmed this yesterday.

However, Mr Caygill said the full extent of extra cost the Government faced this year had not emerged until departments completed their draft estimates after the May announcement.

The Minister of Finance, Mr Douglas, announced last Friday that a second expenditure review had been made after

extra costs of about $lOOO million had come to light.

The Cabinet considered this week across-the-board cuts to be included in this year’s Budget, on top of those in the May announcement.

In Parliament yesterday National’s finance spokesman, Mr George Gair, asked how the $lOOO million costs had not been dealt with in May. Mr Caygill replied, “It was not until the decisions of the expenditure and policy review had been encorporated into department’s estimate, together with the full effect of wage and salary settlements and the most up-to-date estimates of the costs

of major projects, that it was possible to confirm that further action was necessary.” At the time of the May announcement “a number of additional cost pressures were coming to light,” he said. Several departments and Petrocorp, had not advised (he Cabinet until later of the costs .that “think big” projects would impose on the Government this year. Mr , Caygill said Petrocorp’s efficiency in supplying such advice to the Government had been discussed between the Ministers of Energy and Finance, Messrs Tizard and Douglas.