PUBLIC FINANCES
57
of the capital expenditure met from recurrent revenue during that year. Comparative figures are:
Financial Year
(1st April to 31st March)
Revenue $ million
Expenditure $ million
Surplus $ million
1955-6
454.7
402.5
52.2
1956-7
509.7
469.5
40.2
1957-8
584.2
532.7
51.5
1958-9
629.3
589.9
39.4
Deficit
1959-60
664.6
709.9
45.3
=
The principal reason for these results, which look so favourable, is that the exceptionally rapid increase in population generated internal economic activity which raised the yield of taxation sub- stantially without any increase in its rates; there was an inevitable time-lag before the Government could develop the services neces- sary for the increased population. Between the years 1950-1 and 1959-60 revenue increased from $291.7 million to $664.6 million, with no significant increases in tax rates. The rate of increase in revenue has been affected by variations in such factors as the economic situation and inflows of capital, but the upward trend is unbroken. As the development of public and social services has accelerated, so the margin between recurrent revenue and recurrent_expenditure has tended to narrow: for example, the proportion of the latter to the former was 50% in 1952-3 but had risen to 78% by 1959-60. In 1959-60 the surplus of recurrent revenue over recurrent expenditure could no longer finance capital expenditure, and the result for the year was a deficit of $45.3 million. The budget for 1960-1 provided for increased duties on petrol and tobacco and for higher water charges, and it is estimated that total revenue for this year will produce $712.2 million, com- pared with the $664.6 million raised in 1959-60; but expenditure is also rising, and, capital and recurrent, is estimated at $938.3 million. The Estimates therefore provide for a deficit of $226.1 million, to be met from accumulated reserves, though the accounts completed so far suggest it will be much lower, as revenue should be higher than the estimate and expenditure lower.
The Colony's Statement of Assets and Liabilities at 31st March 1960, and analyses of the Colony's Revenue and Expenditure in the financial years 1958-9 and 1959-60, together with the Estimates for 1960-1, are at Appendix II. In 1959-60 the revenue of $665