Business confidence has hit record levels. Investment is surging. Stimulated by lower interest rates and renewed confidence, economic growth reached a level in excess of 3.5 per cent last year. This year, continued strength is projected. As a share of GDP , program spending will continue to fall, to 11.5 per cent by 1999-2000, the lowest level in 50 years.
Many industrial countries use financial requirements as the measure of their deficits .
This has already begun to occur. It will fall again this year even more. Over the next two years, this improvement will continue, with the ratio projected to fall to about 63 per cent from almost 72 per cent in 1995-96. The government will continue, as before, to present two-year fiscal plans based on prudent economic planning assumptions that are consistently more cautious than private sector forecasts. If, as in each of the last three years, the Contingency Reserve is not needed, it will go directly to paying down the debt.