Sessional_Paper_1930 — Page 67

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savings which inevitably occur every year will more than offset the loss. from the fall of the dollar. If the liquid surplus balances of the Colony, estimated on January 1930 at $8,041,363 may properly be used to supplement normal revenue for the purpose of meeting votes for Public Works Extraordinary and for certain heavy items of non-recurrent expenditure included under the heading of special expendi- ture, we are left with the following analysis for 1930:---

Estimated Total Revenue

Deduct Land Sales

Estimated Recurrent Revenue

Estimated Total Expenditure

Deduct Public Works Extraordinary

Royal Naval Volunteer Reserve (disallowed) Certain heavy items of non-recurrent special

expenditure

Gross Recurrent Expenditure

$22,712,920 1,000,000

$21,712,920

$27,268.515

$ 3,840,750

25,433

1,015,000

$ 4,881,183

$22,387.332

10. These figures show an estimated deficit of $674,412, as between estimated recurrent revenue and gross estimated recurrent expenditure; but I fully expect the recurrent revenue to exceed the already approved recurrent expenditure in the light of past experience Even without deducting "special expenditure" items, the re- current revenue has for the past few years in every case exceeded recurrent expen- diture, as is shown in the table which forms enclosure No. 5 to this despatch. I, therefore, view the future with less apprehension than the printed estimates might appear to warrant.

11. On the figures for 1929, it would have been possible to meet the full cost of the salaries scheme estimated at $1,038,934 for that year and still have shown a surplus at the end of the year. The position for 1930 is not quite so favourable owing to the drop in exchange and I consider that it would be advisable to make pro- vision for an increased recurrent revenue of about $1,000,000. I have already un- der consideration a tax on petrol, which should bring in some $200,000 and the possibilities of an amusement tax and of a tax on betting are being investigated; but I cannot anticipate any large revenue from these sources. The only taxes which bring in large sums are the Assessment Tax, the Stamp Tax and the taxes on liquor and tobacco. Of these the taxes on liquor and tobacco have recently been reviewed and are probably as high as it is wise to make them at present, though they may be capable of future enhancement. The Stamp Duties I should prefer not to disturb. There remains the Assessment Tax. The present general rate is 13% and it is expected to yield $4,250,000 in 1930. This cannot be called a high rate in com- parison with other large cities, and I think it could be raised by 4% without any appreciable rise in rents or other undue hardship. An increase in the Assessment rate by 4% should bring in about $1,300,000. From the $1,500,000 thus raised it would be necessary under the present method of calculation to deduct 20%

20% or $300,000 as Military Contribution, for which the Colony will obtain no additional benefit. Your Lordship will no doubt realize that this deduction of 20% acts as a very strong deterrent to the raising of additional revenue and, if Your Lordship could arrange that Military Contribution should not be charged on this additional revenue, necessitated as it is by the normal expansion of activities and by an increase in the cost of living, it would go far to remove any opposition to the proposed in- crease in Taxation.

12. I would accordingly request Your Lordship's authority, if possible by tele- graph, to lay the recommendations of the Commission, as modified by the schedule herein, before the Finance Committee of the Legislative Council with a view to the approval of a vote enabling me to put the new scheme into force with effect from the 1st of January, 1930, and at the same time to proceed with my proposals for raising additional revenue.