CO129-625-2 Finance- revenue equalization fund 1-1-1951 - 31-12-1951 — Page 13

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6. The general effect of these proposals thus would be that in general the Colony's accounts would continue to be maintained on a cash basis, with all expenditure whe ther recurrent or non-recurrent being met from revenue so far as is practicable. The Development Fund would continue to be used to finance large scale and long term schemes which on completion would contribute to revenue, or at the very least would not constitute a recurrent charge on revenue, and the Revenue Equalization Fund would provide the necessary cushion to tide over the difficult adjustment period which must necessarily follow any sudden economic crisis.

7. The problem to be faced is apparent from perusal of the enclosed draft programme of capital expenditure (with accompanying report) which has been adopted by Finance Committee. I feel that it would be most unwise to adopt a programme of this magnitude, to be financed almost entirely from revenue, without some form of reserve to obviate a drastic slashing in the event of revenue temporarily falling short of requirements.

8.

On receipt of your reply I propose to give

consideration to the question of disposing of certain sums of money now standing on deposit in the Treasury the final totals for which have for various reasons not been ascertained. These include for example certain pre-war balances recovered; it seems possible also that a credit balance will eventuate as the result of the Financial Settlement with His Majesty's Government. At first sight it seems to me preferable that such balances, when finally determined, should be credited either to the Development Fund or to the Revenue Equalization Fund rather than to general revenue, and I should be glad of an indication of your views on the matter.

I am, Sir,

Your most obedient, humble servant,

GOVERNOR.