54
PUBLIC FINANCES
economic conditions which the Colony has had to face since the war is a considerable achievement. Equally noteworthy perhaps is the fact that it has been achieved after charging annually against current revenue all capital expenditure (other than a comparatively small amount financed by borrowing). Some indication of how heavy this capital expenditure has been is shown by the figures for the past three years. In 1958-9 capital expenditure totalled $205 million; in 1959-60 $206 million and in 1960-1 $277 million.
The principal reason for these results, which appear so favour- able, is that the exceptionally rapid increase in population generated internal economic activity which raised the yield of taxation substantially without, until recently, any increase in its rates; there was an inevitable time-lag before the Government could develop the services necessary 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 ñarrow: for example, the proportion of the latter to the former was 50% in 1952-3 but had risen to 82% by 1959-60. In 1959-60 the surplus of revenue over expenditure could no longer finance all the capital expenditure, and the result for that year was a deficit of $45.3 million. The budget for 1960-1 forecast further increases in ex- penditure, particularly capital expenditure and, in spite of increased duties on petrol and tobacco and higher water charges, a heavy overall deficit. But the outcome was otherwise, due mainly to an exceptional upsurge in revenue arising from the very active trading conditions which prevailed in the Colony during the year and, to a lesser extent, various economy measures which were taken to curb expenditure. The Estimates for the current financial year are notable in that expenditure at $1,075 million exceeds the $1,000 million mark for the first time in the Colony's history. Revenue is expected to total $914 million after allowing for a number of increased duties and charges and a new tax on the first registration of private cars. The current Estimates, therefore, forecast a deficit of $161 million to be met from accumulated reserves, but the