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It has been usual to pay the charges for Establishments for the month of December and other Expenditure incurred towards the close of the year from the respective votes for the following year. As regards the charges for Establishments the amount does not probably vary much from year to year, but the "Other Expenditure" always varies. The result has been, as you will easily understand, that the position of the Colony in regard to its finances has never in recent years been as correctly presented to Honourable Members as it might have been.
In the accounts which will be laid before you in future you will find that the Expend- iture will, as far as possible, be brought to account against the votes of the year in which it was incurred.
The adjustment will increase the Ordinary Expenditure of the current year by an amount which is estimated at $100,000, and the estimated surplus of Revenue over Ordinary Expenditure will be accordingly reduced from $215,216 to $115,216. If, as might fairly be done, the opium arrears were deducted from Revenue and dealt with as a casual receipt, the estimated surplus would be still further reduced from $115,216 to $65,216.
I now lay on the table the Estimates for 1893. They have been very carefully prepared. The Estimate of Revenue is $1,906,396, and the Estimate of Expenditure, i.e. Ordinary Expenditure, $1,899,611, leaving a possible surplus of $6,785. This Expenditure, however, includes a new item of $40,000 to which I will presently refer.
It is evident from these figures that as I premised in January, a Loan has become an absolute necessity. In the absence of such assistance, the only alternative will be to stop all further execution of Extraordinary Public Works.
Many of them are in progress and when completed will prove directly remunerative, Some will tend to develop the Colony and thus indirectly augment the revenue.
Others are works of necessity. None can be suspended without entailing additional expenditure whenever they are resumed, as ultimately they must be. For these reasons the idea of their temporary abandonment should not for a moment be seriously entertained. This opinion will, I anticipate, be concurred in by Honourable Members, for on the 13th October, 1890, it was authoritatively stated by an influential Councillor that it was the "unanimous wish" of the taxpayers and ratepayers that a Loan should be raised to meet the cost of Public Works Extraordinary. Shortly after my arrival I referred the matter to a Committee of this Council. They reported, and apparently overlooking the "unanimous wish" of the taxpayers, suggested that instead of raising a Loan the Government should obtain the funds it might require from time to time by overdrawing its account at the Bank. This course did not recommend itself to me, as it would certainly be a most extravagant one, seeing that Government could borrow money in London at a much lower rate than it would have to pay for overdrafts.
The existence of available assets in the shape of Crown Lands was also mentioned as a reason against raising a Loan. But, whilst I can quite understand the natural hesitation of Honourable Members to increase the indebtedness of the Colony, it must be evident that the existing commercial depression entirely precludes the realization of large assets by the sale of land. From whatever point of view, therefore, the matter is regarded, the only logical conclusion that can be arrived at is that further postponement in regard to raising a Loan is impossible.
In acknowledging the report of the Committee, I stated that though I did not agree in its recommendations, yet, looking to the ability and experience of its members, I would not proceed further in the matter at that moment. Nevertheless I asked the Secretary of State to permit me to contract a Loan if the financial position did not improve; and by a despatch dated 29th July I received that permission, sanctioning a Loan not exceeding £200,000. The works which his Lordship considers most urgently necessary are the completion of the Central Market, the Praya Reclamation, the Water and Drainage undertakings, and the improvement in Gaol accommodation.
He does not consider that any works beyond these should be charged to the Loan, but he consents to its also bearing the expense for such works which may have been incurred during the current year.
The Secretary of State has decided that the amount of £200,000 shall be raised by Inscribed stock, and not by Debentures, as was the case with the first Loan.
Ordinances to give effect to this decision will accordingly be laid before you. As the public works to be constructed will not be immediately remunerative, the contribution to a sinking fund will be deferred, and these contributions will probably commence three years from the date on which the interest on the amount raised begins to accrue.