CO129-562-4 Levy on salaries 27-5-1937 - 28-6-1937 — Page 8

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Your Excellency,

The Levy on Salaries Ordinance, No. 2 of 1937, provides that in respect of the months of July to December inclusive, 1937, or of any of them, this Council may by resolution continue, reduce or abandon the percentage deductions specified in the Ordinance

which have been in force since 1st January this year.

As Honourable Members are aware the levy on salaries of

all Government officers was originally imposed on 1st January, 1936. The reasons for it and the savings effected by it last year are fully set out in paragraph 22 of the Report on the Finances for the Colony for the year 1936 which is now in your hands.

At the time of framing the Estimates for 1937 the

financial outlook was still obscure and it was found necessary to budget for a deficit of nearly 32 million dollars. It was, there- fore, decided with great reluctance, which was shared by the Secretary of State, that the levy should be continued at least for another six months, but in a slightly modified form, estimated to produce a saving of about $450,000 per annum.

The financial position has considerably improved. At the

end of the 24th week, that is nearly half way through the year,

revenue has exceeded the proportionate fraction of the year's estimate by $1,232,870, and is $1,334,996 more than the revenue collected in the same period last year. Revenue is higher than it has been since the year 1933 and I see no reason to expect that this higher level will not be maintained. Even if the total Expenditure is not less than the Estimate, and it frequently is, I do not expect that a serious deficit will emerge at the end of this year or that our balance of assets over liabilities will be greatly reduced. The modified levy is now, as I have indicated, a con- paratively unimportant factor in the Colony's expenditure and its continuance is felt to be a hindrance to the recruitment of new officers and a bad advertisement of the Colony's financial standing.