- 4
specifically classed as war expenditure. The estimated revenue is
$54,336,000, $45,536,000 from ordinary sources, and $9,300,000
from war taxation, leaving a deficit of $7,553,776. There is one
item in the draft estimates, namely a lighthouse tender for the
Harbour Department, estimated to cost $600,000, the building of
which would in any case be conditional on happier times and the
cessation of other expenditure. Omitting this item, therefore,
from the estimates we are faced with a deficit of roughly 7 million
dollars.
There have been two major considerations in framing the
estimates, first defence, secondly social services. Defence it
is submitted must in present circumstances come first, but it is
also submitted that in the present financial position of this
Colony social services must not be allowed to lag behind, nor even
to stand still, but should advance so far as circumstances permit.
The major items in the defence budget for next year are 4
million dollars for the completion of the programme for the con-
struction of tunnels, concrete pens, etc., for the protection
of the civil population against air attack and $5,220,000 for
the construction of vessels to be presented to the Admiralty and
War Department, in respect of which no expenditure has been in-
curred during the present year. No specific provision has been
made for cash gifts to H.M. Government as these will depend on
the financial position during the course of the year, but I
venture to submit that in meeting from its own resources the
relatively large local defence programme undertaken under Your
Excellency's direction this Colony has made a definite contribution
to the defence of the Empire.
Regarding social services it is my firm belief that
economic development must precede and be the basis of social
225