11 short of the estimates. The disorders in the spring, besides causing a temporpy suspension of work of all kinds, rendered necessary a cautious policy in carrying out plans for the immediate future, with the result that much of the work wnich would have been accomplished will be thrown forward into the year 1920-1921. Difficulty in obtaining supplies from abroad has also prevented the outlay of a large portion of the sums provided for this purpose.

The net result of all these factors is at instead of the deficit of £E. 1,550,000 estimated for in the Budget, a surplus of some £E. 3,000,000 may be anticipated, which will swell the Government Ileserve to approximately £E. 14,000,000.

The expansion in the scale of expenditure during the period which I have thus passed summarily under review, as measured by the Budget estimates, appears as follows:— £E Budget for 1919-20 ... ... ... ... 28,850,000 Budget for 1914r-15 ... ... 18,162,000 Increase ... 10,688,000 This large increase is due, in a preponderant degree, to expenditure forced upon the Government by circumstances arising directly and indirectly out of the war, the real increase on account of development and extension of services being relatively very small.

Although the taxable capacity of the population has increased greatly during the jieriod, the inelastic character of some of the principal sources of taxation has prevented the revenue from expanding automatically to a degree sufficient to keep pace with the increasing expenditure, and the- Government has, therefore, had recourse to such additional imposts, some of them of a more or less temporary character, as lay within its limited powers of taxation.

The following table shows the revenue and expenditure for the five years 1914-15 to 1918-19 The progress of the principal heads of receipts is shown in the following table Direct taxes Customs and Excise Judicial and registration fees Kailways State Domains .. Interest on funds 19H-15.

£E. 5,254,096 3,105,176 1,195,103 8,176,220 368,004 301,027 1915-16.

5,594,314 3,830,138 1,237,531 3,724,848 810,847 390,756 1916-17. 1917-18.

£E. 5,575,338 4,840,163 1,37 6, .56 5 4,460,897 866,585 649,218 £E. 5,608,712 5,331,902 1,627,294 5,003,662 1,033,845 1,170,306 1918-19.

£E. 5,612,291 6,926,089 1,606,939 6.991,105 989,288 1,615,521 The situation of the Ileserve Funds at the end of each of the five years was as follows:— 1914- 15 1915- 16 1916- 17 1917- 18 1918- 19 General Reserve Fund.

£E. 3,634,890 4,799,642 6,490,310 6,770,179 10,979,838 Silver Reserve Fund.

£E.

996,000 1,385,257 1,452,581 [3437 3/—2] C 2 House of Commons Parliamentary Papers Online. Copyright (c) 2006 ProQuest Information and Learning Company. All rights reserved.