71
(6).
-3-
8.
It is satisfactory that since the liberation of the Colony it has so far been possible, year by year, to increase the revenue balance. Owing to heavy demands for expenditure on security measures, it has only been possible to budget for a negligible surplus in respect of the present year, but as you observed in paragraph 2 of your telegram No. 285 of 12th March, 1949, the revenue estimates have been framed on a conservative basis and, if there is no deterioration in trade conditions or in the political situation, and no heavy unforeseeable expenditure has to be met, a larger surplus than that budgeted for may again be a possibility.
9.
The kev note of the 1949-50 budget is security, for in view of the deteriorating situation in South East Asia generally, our first priority must be the preservation of law and order within our borders. It is necessary to guard against developments which may or may not occur, and this has entailed a considerable expansion in the Police Force. The training and equipment of the Defence Force whose primary role is to support the Police in the maintenance of internal order will also involve the Colony in heavy expenditure, both of a recurrent and capital nature. Expenditure in the present budget having a direct or indirect bearing on security reaches the formidable figure of $26,000,000.
10.
When introduced into Legislative Council the estimates of revenue and expenditure were as follows :-
Revenue.
Expenditure.
Surplus..
•
$180,019,370
179,586,970
432,400
As I have already explained, a number of changes were made in Select Committee.in respect of matters which were not finalised when the draft estimates were printed. As a result of these changes the final revenue and expenditure figures became :-
Revenue.
•
Expenditure.
Surplus....
$180,151,370
179,924,312
$227,058
The higher revenue figure makes allowance for a rental of $132,000 in respect of a wharf requisitioned from the Custodian of Property, which has since been rented to a local shipping firm. As a result of this arrangement both revenue and expenditure have been increased by $132,000.
11.
The revenue estimate, which while not pessimistic was framed with due regard to all foreseeable factors, includes a grant of $16,000,000 made by His Majesty's Government as part of the war expenditure settlement to assist the Colony in solving problems arising out of expenditure connected with the war. Even with this addition, however, it was found that on the existing basis of taxation the revenue total was still between one and two million below the figure required to finance expenditure, even after