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3.
direct sterling expenditure, and this of course accounts for the greater part of the deficit. In the case of stores bought and payments made through the Crown Agents no saving is possible. In the case of salaries, the Government has very reluctantly come to the conclusion that the levy in some form will have to be continued. It is proposed to lower the rate of conversion for sterling salaries by three farthings to the Budget rate of 1/3, if the dollar remains at or below that figure as from the first of January and to continue the levy on both dollar and sterling salaries. It is hoped however that it will be possible to reduce the levy by about 20% and the position will be reviewed towards the end of this year with that object in view. The levy will produce between a quarter and half a million according to the rate ultimately
decided upon.
I am authorised to state in this connection
that the Secretary of State for the Colonies has agreed to the continuation of the levy in 1937 with very great reluc- tance, and desires an assurance to be given that an emergency imposition of this character will not be maintained any longer
than is demanded by the obscurity of the financial outlook.
I trust that
Next with regard to taxation.
Honourable Members will agree that in the circumstances no
reduction of taxation can be looked for in 1937, On the other
hand no further taxation is envisaged in the Revenue Estimates, with the exception of one item which has already been mention- ed in this Council. I refer to the tax on motor vehicles
which, it is proposed, should be raised by 30% to 40% when
licences next fall due for renewal. In this connection
I think it is relevant to mention item No.58 under Public
Works Extraordinary which refers to an expenditure of