Enclosure No. 2.
Honourable Members of the Legislative Council:
Before the Colonial Secretary rises to
move the first reading of the Supply Bill for 1929 I desire to place before you a brief resumé of the financial situation of the Colony which
may help to explain the basis on which the estimates of expenditure have been framed.
When I introduced the Budget for 1928 I
set before the Council an estimate of our position
at the end of 1927 and at the end of 1928. Now Budget-making has not yet been reduced to an exact science and events have a trick of falsifying the most careful estimates. It is therefore natural
for Budget-makers to err on the side of caution, for should events prove their prophecies to have erred on the side of optimism the result may well be disastrous to the financial stability of the Colony, while the errors of caution, if not pushed to excess, are likely at the worst to lead only to delay in the execution of works which, however desirable, cannot be classed as essential.
Leaving out of account for the moment
the sum of $1,963,358 which is due for repayment to surplus balances from Loan Funds we anticipated
an actual surplus of assets on the working of the year 1927 of $2,184,033 of which some $500,000
would be liquid.
The actual result for 1927 falsified our
predictions in that the revenue instead of being below our estimai: exceeded it by $337,139, while
our expenditure fell short of our estimate by
$1,469,637,
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