CO129-561-10 Estimates 1938 2-9-1937 - 23-9-1938 — Page 342

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year are $31,240,000 and $32,102,000 respectively,

showing a deficit of about $900,000, and on this basis

the anticipated surplus at the end of 1937 is a little

over $12,000,000.

4.

I have felt justified, therefore, in again

budgeting for a deficit in 1938. Until the recent

disturbances due to the outbreak of hostilities between

China and Japan there was every indication of continued

improvement in the trade position; and, although the

full effect of those disturbances is still difficult to

calculate, it is not thought that in the immediate future they will have any seriously adverse influence on the revenue of the Colony. I hope, therefore, that 1937 may actually show no deficit at all and that the estimates of revenue may once more be exceeded in 1938.

5.

The Estimates as I propose to present them to

the Legislative Council on the 22nd September next show Revenue of $30,255,000 and Expenditure of something over

$33,000,000, a deficit of approximately $3,000,000, which would mean a reduction of the surplus by the end of 1938 to about $9,000,000. It will be observed that this surplus balance is substantially higher than the figure contemplated when the 1937 Estimates were approved. I have every hope that the continued exercise of economy in expenditure together with increased revenue will in fact once again avoid any such reduction in the surplus; but I am satisfied that, in view of the many necessary services that have been drastically curtailed of late years a reduction even to the figure of $9,000,000 would be justifiable. It is, I consider, a very important factor that taxation in the Colony is still low, and while I