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2.
if necessary to meet any deficit in respect of next year. We have
in fact a nominal reserve of 17 million dollars, a real reserve of
about 7 million and a public debt of 27 million.
I will now refer to the current 15 months and I do not pro-
pose to quote detailed figures, all of which are set out in the memo
randum. Suffice it to say that the estimate of ordinary revenue
approximated to that of ordinary expenditure, while the proposed
separate war budget gave place to a new head entitled War Expenditure.
I shall deal with War Revenue and expenditure first. Income Tax,
which it was originally proposed to introduce to provide the necessary
additional war revenue, Was estimated to bring in annually 10 million
dollars. The war taxation which was substituted for it was expected
to bring in 6 million dollars. The revised estimate which I am afraid
is somewhat on the optimistic side is $9,700,000. When Mr. Caine add-
ressed this Council on the Budget for 1940-41 he stated in this
connection:
"We are proposing a standard rate of Income Tax of 10%, with a
possible surtax on very high incomes. I will explain later
more of the detail, but the yield at 10% was put by the Taxa-
tion Committee at about $10,000,000 per annum. I can at
present give no reliable estimate of the costs of administration
but they are likely to be only a small percentage. The local
defence and war expenses are not likely to aggregate more than $2,000,000 per annum and the balance payable to His Majesty's Government should be of the order of $7,000,000 or $8,000,000.
I do beg, however, that nobody will hold these figures against
me if they turn out wrong. There are no statistics whatever
of total incomes in the Colony and we are compelled to do a
lot of guesswork at this stage"