Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1698073843103.pdf (Guyana)
(Constituted SEtOND LEGISLATIVE COUNCIL Provisions) Guiana (Constitution) 1953 and 1956).

(Temporary in Council, under the British Orders Thursday, 8th January, 1959 The Council met at 2 p.m.

PRESENT: Speaker, His Honour Sir Donald Jackson Chief Secretary, Attorney-General, Financial The Honourable Hon.

A. M. I. Austin, Q.C.

Hon.

F. W. Essex.

Hon.


M. S. Porcher Secretary, (acting) B. H. Benn Member for Essequibo River ex officio (Minister of Communitv Development and Education) " ,, E.B, Bebarry - Member for Eastern (Minister Demerara of Natural Resources) " " Janet Jagan Ram Kanan .
-·· .-·� Mr. R. B. Gajraj1 ,, W. O. R. Kendall R. C. Tel10 F. Bowman " L. F. S. Burnham " S. Campbell A. L. Jackson Member for Wes tern Essequibo (Minister of Labour, Health and Housing) Member for Demerara-Essequibo · and · · of Communic.ations (Minister .

Works)., .

.
Works)., .

.

Nominated Member Member for New Amsterdam Nominated Member Member for Demerara Member for Georgetown Member for North Wes tern District Central River Member for Georgetown North " B. S. Rai ,, S. M. Saffee " Ajodba Singh J. N. Singh " R. E. Davis " A. M. Fredericks ,, A. G. Tasker, Member for Central Demerara 111 ember for Wes tern Berbice Member for Berbice RiTJer Member for Georgetown South Nominated Member Nominated Member O.B.E.

Nominated Member.

Mr.


I. Crum Ewing-Clerk Mr. E. V. Viapree-Assistant of the Legislature Clerk of the Legislature.

ABSENT: Hon.

Dr. C. B. Jagan, Mr. H. J. M. Hubbard........:on Minister of Trade and Industry-on leave.

leave.

The Clerk r�ad_PJ'clYetS.

-' I ·i ' I 71 Petition 8TH JANUARY, 1959.

Question.s 72 MINUTES Mr. Speaker: The Minutes of the meeting of the Council held on 29th December, 1958 have been printed and circulated.

Minutes be confirmed.

The question is, that those Agreed to.


Minutes confirmed.

Leave to Member.

I have to announce Mr. Speaker: that the hon.

the Minister Industry, the 4th - which is already gone of this month on leave, on duty.

the 15th of Trade an<l Dr. Jagan, will be away from � to PAPERS LAID The Financial (Mr. Essex): I beg to lay on the Table the Draft Estimates, Secretary: 19 59 and the Draft Estimates {Development) 1959.
The Minister �pment and Education behalf of the Minister and Works, I beg to lay on the Table the of Community (Mr. Benn): On Devel­ of Communicalions and widen its affiliation Institute.

of this membership with modern trends the founda­ a Training to the Institute stands at 60 Full Members.

Members and l O Honorary of (of the United Kingdom} and its own and acquiring bodies: 2.
That the enrolled organization 12 Associate Members .. 3.That in keeping it is proposed to strengthen tions of the organization scooe by establishing securin11 Journalists other allied property.

4.That at tbe general ornanization 2, 1958. mernbers were firmly of the view that neither tion nor anv other was i:onducive best nursuit of our obiective�.

accorrlinglv seek incornoration Your Petitioner� oermission Mr. Antonv G. Tasker.

Memher of the Le_gislMive <:'ouncil.


a Bill intituied Incorporate Association nected therewith.

to the and to thev un,inimouslv request respectfullv bv to have introduced the British con­ and for purposes An Ordinance Guiana Press state of unincorpora­ held on September a nominate<!

meetinl?

of the our present by statute.

decided to And as in duty bound will ever pray.

Cyril P. Wight Patron Jake Augustus Honorarv Croker Secretary Petitioners.

Post and Telegraph (Late Fee) Regula­ tions, 1958, {No.
25) made on the 14th of November, 97 of the Post and Telegraph Ordi­ nance, (Chapter in the Gazette ber, 1958. on the 29th of Novem­ 1958, under section 132) and published Agreed to.

Demerara.

Monday January 5, I 959."

Mr. Speaker: Hon.

Members, the papers are in order.

The question is, that the promoters be allowed to proceed.

The Clerk read the following P�titic:i: PETITION INCORPORATION OF B.G.
PRESS ASSOCIATION ORAL ASKING AND ANSWERING OF QUESTIONS CIVIL .SERVICE ARBITRATION TRIBUNAL Mr. Tello: Mr. Speaker, I beg to ask the hon.

the Chief Secertary tions standing Government contemplate Civil Service in the United Kingdom ?

Arbitration Tribunal the ques­ in my name.

Does establishing a as exists .

The Chief Secretary (Mr. Porcher, is as follows: acting): Sir.

the reply to the hon.


Mem­ ber's Question The question Tribunal of estaplishing for the Civil Service is being examined as part of general proposals the procedure tiation for improving and neg,,­ for conciliation in the Civil Service.

an Arbitration Mr. Tello: If so, is the machinery being worked out in full consultation the Staff Associations concerned ?

with "His Honour .the Speaker and Hon· Members of the Legislative ourable Council.
The Humble Petition Cyril Percy Wight of : · and Croker Jake Augustus in their capacity representatives Guiana Press Association.

as the accredited of the British : Guiana Press Asso­ a cultural organisation basis and catering Respectfully Sheweth I.That the British ciation, on a non-profit and advancing safeguarding interests Journalism of Journalists, the Press, has been functioning unincorporated operating for body from 1944.

.. .

and as an the best I' 73 Bills lhH JANUARY, 1959.


Budget Statement 74 The Chief Secretary: If it is decided to establish an Arbitration Tribunal for the Civil Service, the necessary machinery will be worked out in consultation with all Staff Associations concerned.
INTRODUCTION OF BILLS The Minister of Labour, Health and Housing (Mrs. Jagan): On behalf of the Minister of Trade and Industry, I beg to give notice of the introduction and First Reading of a Bill intituled - "An Ordinance to amend the Rice Marketing Ordinance."

Mr. Benn: l beg to give notice of the introduction and First Reading of a Bill intituled - "An Ordinance LO provide for valuation of property for rating purposes and for purposes connected therewith."
ORDER OF THE DAY BILLS - FIRST READING The following Bills were read the First time : A Bill intituled "An Ordinance Lo amend the Rice Marketing Ordi a11::e:· A Bill intituled '"An Ordinance to pro vide for valuation of property for rating purposes and for purposes connected therewith."

APPROPRIATION BTLL The Financial Secretary: move the Second Reading of intitul~:l I beg to the Bill " An Ordinance Supplies granted Session of the Legislative Council."
the the current to appropriate in BUDGET STATEMENT lot The Financial Secretary : This is the third budget which it has fallen to my in British to present Guiana, and on the previous two occas10ns I have had at the back of my mind the thoughts of the Director in the Prelude to " Faust" who felt his hopes receding that he would be able to give the public what it wanted and expected, and won dered " How can we manage something not only important, yet fresh and new - I am afraid that this attractive too" .
year much of what I have to say will not longer be attractive, though the situation reveal ed is certainly important enough.

The short-term financial position is a difficult one, but the term much more hopeful.

The basic difficulties are largely :.


:aused by circumstances in the large world outside British Guiana, circumstances which have had a delayed effect as far as we are concerned, and which produce their maximum adverse effect in 19 59 so far as public revenues are concerned, though we have weathered them in 1958. in I 9 59, 2.
The two main external influences in late 1957 and 1958 have been, firstly, the world industrial recession which has had an eff P,ct on the demand for calcinet.l bauxite, aluminium and, consequently, metal grade bauxite, and secondly, the shortage of capital for investment, par ticularly territories.

for underdeveloped The first has affected our direct and the second, indirect revenue potentially, the steady progress of our 1959 development programme.
We have reason to hope, however, that after 19_59 \Ve are told the position will be easier.

that the outlook for bauxite is brighter this year, and we feel that we shall gradu ally pull back to the position of the peak production year, 1956, and see the alumina plant come into production with no fur ther postponements of the target date.
As regards capital, the outlook for United Kmgdom dependent overseas territories as a whole has brightened considerably with the decision of Her Majesty's Gov ernment to make them direct exchequer loans in 19 59 i!l place of loans from the London Market.

As regards British Guiana itself we have already benefited from the new policy by l:>eing granted such a loan, £5¼M, in mid-1958, which has enabled us to proceed as planned in 1958.
For the Commonwealth as a wh .. Je, with which our economy is inextricably bound, there has been successive encour agement with the progressive lowering of the United Kingdom bank rate, and cul minating with the recent announcement of transferable account sterling.
Another good sign is the decision the capital to augment resources of international lending agencies, particularly the International Bank, and here again we have been especially for- convertibility of the I 1 ~ - 75 Budget 8TH JANUARY, 1959.

Statement 76 [THE FINANCIAL SECRETARY] tunate in getting a senior representative of the Bank to visit us so shortly after we had asked for assistance.
The Govern ment is very grateful for the Bank's ready acceptance of our request, and for the encouraging statements that the Bank's representative made.

We await with interest the Bank's report on our economy and the pessibility of its lending to us for the development programme.

3.
3.

As regards internal adverse factors, the bad rice harvests of 1956 and 1957 have undoubtedly affected the economy in 1958, but here again there is evidence that the exceptionally good har vest of 19 58 the situation is pulling round.

I I I ~ I 4.

I shall return to the economic effect of these and other factors later, but I would like to begin by ~iving a more quantified assessment than usual of the economic state of territory, past, present and how we feel the future might be.
the National Income Statistics 5.

During the year a considerable effort has been made to put our national income statistics on a firm basis following the excellent earlier work of Percival and D 'Andrade on the years 1948 to 19 51.

We are indebted to the University Col lege of the West Indies for making avail able for this purpose a skilled research worker field, Miss Carleen O'Loughlin.
Her study, which we hope will be .i;>ublished early this year, is of the period 1952-1956, but it will be possible with our.

own statistical bureau to keep the figures up-to-date in future.

this in 6.
this in 6.

During the 1952 to 1956 period the total value of home production, or more precisely what the statisticians call "the gross domestic product at factor cost", increased from $160M to $208M, is and the provisional figure for 1957 $223M; the increase between 1952/ 53 was $17M, between 1953/ 54 $16M, there was no increase between I 9 !i4 and 19 5 5 and one of about $15M in each of the two years between 1955 and 1957.
After :making provision replacement of capital c.onswned in produ<.tion, that is for for the depreciat~on of the fixed assets of the producers, adding income from abroad and deducting income paid abroad, this production yielded the people of British Guiana a national income which rose from $144M in 1952 to $189M in 1956 and on the provisional figure, to $199M in 1957, - an increase of 38% in the five-year Since the goods and services on period.
which this income was spent increased in price by something like 15 o/o during the period, the real national income in terms of purchasing power had risen by about The growth in the 20o/o in five years.

volume of production was lower-perhaps about lOo/o over the period- but as im ports had cheapened in terms of exports, we were able to enjoy a higher real in come than the mere volume growth in production could sustain.

7.

I do not wish to burden Hon.


Members now with a mass of statistical data, interesting though it might be to study at leisure.

As 1 have said before, it is possible from such figures to draw fallacious conclusions.

But there can be no doubt about the first conclusion.

The figures we have demonstrate what we have all along known by evidence and in stinct, how dependent we are for our in come on the two major export industries, bauxite and sugar.
In 19 5 7 they produced about 28 o/o of the gross domestic product.

The figure, for rice and timber, t11e main export supporters to sugar and bauxite were about 5 ',3/o and 2 % respectively.

When we consider the extent of the effect from on all sectors of variations in the 7 o/o rice and timber in dustries, the 28% the significance of sugar and bauxite figure becomes appar ent.
The manufacturing sector, excluding the processing of sugar cane, padi and coconuts, was still disappointingly low in 19 5 7 as the provisional figures show, uut it slightly increased from 5% to 4o/o since the 1952 to 1956 period, and shows an absolute increase of $1.4M between 1956 and 19 5 7.

For the rest, the national income figures show mainly the import ance of ancillary services to the main industries, in the distribution, construc tion, and transport sectors.
This reflects the high degree of entrepreneurship com mented on by Mr. John Adler of the In- the economy 77 Bu,<J,get 8TH J ANUARY, 1959.

Statement 7~ tei:na\ion:a:tl ~anl,.

during his visit year.

last from abroad and a high level of loc~l savings.

8.

For the period 1952 to 1957 there has been a steady but not unduly spectacular development in the economy, but it is worth noting that in 19 5 5 the per capita income was about the same as Jamaica, but lower than that of Trini dad.
The present rate of growth, however, in Jamaica particularly, may be fastaf than ours.

It is a lso interesting to note the comparison with certain Latin American for our 1955 per capita countries, national two-thirds income was about that of Brazil, roughly the same as that of Mexico or Guatemala, and higher than that of Bolivia, Paraguay or Peru.

9.
9.

We have developed our national income in the period since 195 2 by the heavy investment in the Government and private sectors, and by the substantial rise in the value of bauxite exports up to 1956.

And this was done despite the adverse effect of the low rice harvests of 1956 and 1957.
The rise in the national income has been matched by a rise in Government revenues from $30M in 1952 to $46M in I 9 5 7, and the two sets of figures must belie once and for all the often repeated opinion that the country is stagnating.

formation, which 10.

Further evidence of our develop ment is given by the figure for gross fixed capital consists of expenditure on the replacement and expan sion of the Colony's capital equipment in the form of fixed assets.
The figure for this rose from $26M in 1952 to $48M in 1956, averaging over the period about 20% of the gross domestic product ::it factor cost.

In 1956 total net investment in new assets, fixed and current, totalled $40M, of which local savings financed $25M with $ISM financed by capital in flow from abroad.

Local savings rose from 8% of the national income in 1952 to 13 % in 1956.

The rising rate of sav ings and the high level of investment are heartening, and lay the foundation for the future.
But it cannot be too strongly emphasized that the high level of invest ment needed to expand employment and to raise living standards can only be achieved by a continuing inflow of capital 11.

I should now like to give some idea of how the national economy is likely to be affected by developments over the next five years.
The first of the postlllates is that the production of sugar, rum and molasses will continue to rise at the rate of 1 % per annum with a growing de mand, which will be met by a slight in crease in acreage and a better yield per It is further assumed that the acre.
value of the rice crop will have increased by 1964 by some 75o/o of the 1955 yield, 19 5 5 being taken as the last normal year, through ~he Government Drainage and Irrigation programme bringing an addi tional 75,000 acres into use during the period 1960-1963.
The product from an additional 18,000 acres of land under coconuts and crops other than rice should increase from $7.SM in 19S7 to $9.SM It is also assumed that con in 1964. struction by Government and private in vestment will be maintained at the level of the present development period.

12.

The major new factors which should increase the gross domestic pro duct are, however, the coming into produc tion of the alumina plant, and commer cial mining of manganese.
The alumin,1 plant should begin commercial produc tion some time in 1961 and reach its full rated capacity of 200,000 tons a year in 1963.

As Hon.

Members will remember, it is expected to employ 700 people.

fhe the economy should be very effect on considerable, directly and indirectly witn · the natural increase in transport, distri bution and ancillary services which it will engender.
Manganese mining should begin a year earlier, some time i.n 1960, and reach its planned maximum produc This industry tion from 1962 onward.

should directly employ 200 when in f.ull production, and also be a considerable Al stimulus on the general economy.
though these two major developments will not have their full effect on Government revenues till after 1964, since they have been given tax holidays, Government re venues will undoubtedly benefit in the interim from incomes generated, and in the case of manganese, from royalties paid on the ore extracted.

I ~ 79 Budget 8TH JANUARY, 1959.

Statement 80 (THE FINANCIAL SECRETARY] that these trend.

I <::annot emphasize 13.


If all goes more or less according to our hypotheses, the gross domestic produet at 19 58 prices should increase from $223M in 1CJ57 to at least $297:M in 1964, the largest increases being $2 n-1 from $23 71\1 in 1960 to $259M in 196.l , and $18M from 1961 to 1962 .
T he rise of $651\1 between 1959 and 1963 com pares with one of $33M between 1955 and 19 59, which shows a very satisfac tory too strongly figur.es do only illustrate trends, and it is difficult to con vert the figures directly into estimates of the increased prosperity and happiness of the individual.
They do show that there is a good chance of that happening, how ever, and I repeat that as far as the country as a whole is concerned it cannot possibly be said with justification, though 1t is often said, that we are stagnating.

The effect of even small increases in the basic production sectors of sugar, rice and mining are magnified in the increases in the ancillary sectors which are the real touchstone of the individual's prosperity.
Decreases in the main sectors take rather longer to have an effect both on the in dividual and on the Government revenue.

But it is clear that the general trend is upward and should continue so.

14.

The requirement is that the pros perity of the basic industries on which we so largely depend, in agriculture and mining, should continue.

vVe must also have political stability and settled condi tions generally.
It is clear from an analysis of our economy that as far as agricultural development is concerned we shall need considerable assistance from overseas capital, either in the form of free grants or anyway low interest long term loans, since the direct return on the capital at least in the form of padi is low.

But it is in this field that a good deal of our increasing population will be employed directly or indirectly.
Produc tion costs of padi must be kept as low as possible, since we are counting on export ing the major part of the crup, and the provision of basic improvements for the rice industry falls naturally on the Gov ernment ·for direct return 0:1 capital is not high in this field.

lot for 15.

The next requirement is ·that we should produce many more of our basit: requirements which we now import.

The need here is for local capital to invest in productive industry, manufacturing and agricultural.
We still do not con,;um•· •~nough of our local fruit and vegetahk.

;, indeed in some varieties we do not 1:i-, 0 · duce enough to consume, so we rely heavily on imports at large cost to our economy.

19,000,000 lbs.

a year of im ported potatoes take a lot of swallowing in a rice and cassava producing country.

On the manufacturing side we have seen the success of the brewery and the mar garine factory.
We no longer need t l import beer or margarine, and that sav~; the country, though it quite a would save considerably more if we did not have to import so much vf the in gredients from outside.

One hopes that these industries will also become exporters of the finished product as soon as pos sible.
We meet a good deal of our clothing requirements, again admittedly from imported materials, we do a bit of canning, we have a first-class biscuit making industry, we are going to have a first-class particle board factory.

But there are still a lot of minor industries where we can produce an article as good as the imported one at roughly the same cost, so long as someone w11l start them.
China, glass, cane furmture, coaonut fibre, confectionery, fruit canning; we 11ave gone some way with these but what they now require is an injection of capi The Credit Corporation can help tal.
with loans to private industry and it does help, but the Government cannot do it all, ana what we want is a further mobilisa tion of local Guianese private capital, some of that capital which is undoubtedly going overseas to investments, or perhaps iust going overseas, with a hope that the bread cast on the waters of the pools will T he bread come back a thousand fold.

llas been estimated at a high figure and we shall obviously have to do something about that.
Capital to this extent cannot be exported if we are properly to develop our own resources, and it is silly to have to replace it by overseas borrowed capital on which we have to pay interest and re pay in the course of time.

81 Budget 8 TH JANUARY, 1959.

Statement 82 Trade in 19 58 important 16.

It is also that we should be prepared for and not be too depressed by pauses in the general run of the Country's economic development in terms of its production.
There has been It is of course such a pause in 1958. extremely difficult to estimate at this stage what the gross domestic product has been for 19 58, but the indications are that the figure for 1958 will be $208M, i.e.

$ ISM less than in 19 5 7 and a reversion to the same figure as in 1956.

The estimated value of exports in 1958 is $92M as against $108M for 1957.
The main de crease will be in the value of bauxite, both calcined and dried, for in the first 10 months of the year the value was 35 % or $9M less than for the corresponding r,>eriod of 19 5 7.

The exports of rice for the first 10 months of 1958 were also down SO% in value, but this figure is misleading be cause the good harvest of 1958 will not show its effect in the exports until next year.

The value of sugar exported for the first 10 months was 7 % or $2 .
7M less than for the same period in 1957 , despite the record production and export, which is more than offset by the decrease in the average price per ton obtained.

De creases of this size, as will follow from what I have already said.

are bound to have an adverse effect on the nationa 1 economy generally .

17.

There were, however, some en couraging increases in the value of cer tain exports though they do not in the aggregate offset anythini: like the decrease in the value of our main exports.
One of the most encouraging of the increases is the value of ships and boats exported ; it is impressive that nearly $IM worth of ships had been exported in the fi rst 10 In minit~g, exports months of the year.

of gold for the first 10 months of 1958 were also 50% higher than for the same period of 19 5 7.

Timber exports were up 3 % , charcoal 11 % and the exports of medicines.
toilet waters and the like were It is also en also better than in 19 5 7. coura~ing that the export of matcl:les had begun to improve in 19 58 compared with 19 5 7.

Taking the picture as a whole.

however, the total value of domestic pro duce exported in the first 10 months was 16 % less tha~ in the same period of 19 5 7.

These were down 18.

On the other hand the total value of imported goods increased in the first Food 10 months by $309,000 or .3%.
on the whole was down .½ % , though oils and fats were up by 4%.

The most in dicative decrease, however, was in the in dustrial group, such as crude industrial materials.

22% , mineral fuels and lubricants 13%.

The machinery group on the whole, however, did show an increase-a quite consider able one.

Electrical imports were up by $3 15,000 or 49 % and other machinery by $1.4M, of wh ich $886,000 comprised sugar-making machinery.
As regards non-industrial imports one observes that the imports of glass and glassware in creased by $391,000 or 43%.

This is interesting because of the possibility which I have mentioned of our having our Electrical own glass industry here.

apparatus and appliances increased by over $1M or 38 %, and road motor vehicles and parts, other than private motor cars, increased by 18 %.

The value of imports of private cars decreased by nearly $.½ M or 23 % .
in 19 58 It means in 1957. trading balance 19.

The estimated total value of our imports for the whole year is $119M, so that the total value of external trade will fall by about 6% i.e.

$2 11M as against $226M that our is adverse estimated at about $26M as .

compared with $10M last year.


As I said then, how ever, this is not something about which we should get worried at the moment, for to be an adverse there will continue visible trading balance so long as the Government is investing in a large capital Development Programme financed largely by external loans and grants, and invest ment in the private sector is a lso increas Such ing.

financed by overseas capital.


projects as the Alumina Plant and the development of the l\Ianganese Mines in themselves have a substantial effect on the figure.,;.

Dur ing 19 58 good progress has been made on the installation of plant in the manganese area at Matthews Ridge, and it is hoped that the railway will be completed in time to allow production to begin some time in 1960. the construction of 20.

I should plerhaps include here, 83 Budget 8TH JANUARY, 1959.
Statement 84 [THE FINANCIAL SECRETARYl some other figures for mining develop ment in 1958.

As regards gold it is most unfortunate that British Guiana Consoli dated Goldfields Ltd., who were the major producers of gold in the country, should have stopped work in October when the total production of gold to the end of October was the same as for the whole of 19 S 7.
It is unlikely to have increased by much more, and it seems unlikely that we shall be able to maintain this figure next year, though there are rumours of new strikes in various areas.

The 1958 production of diamonds is expected to be about the same as that for 1957 despite the fall in production from surface •vash ing methods.

One would expect the an nual figure to remain at something li!

:e 30,000 carats for some time to come.


Looking again to the future, the Marine Seismic Survey of the whole offshore area was completed by the middle of the year by the Standard Oil Company of Cali fornia.

The results of this survey are not yet known, so we are still in the <lark as to whether there is likely to be oil in British Guiana or not.

The interpretation of such surveys is a very skilled and long process, but we would expect to know the results by say March.
If the indications are positive then we would hope that further explorations by means of detailed seismic survey or drilling would be put in hand at the earliest opportunity.

Prospects for 1959 21 .

This seems an appropriate point for me to attempt an assessment of the economic activity in 1959, with particular reference to the question of employment.

I do not cease to be surprised to learn that in the budget proposals is expected The a panacea to end unemployment.
Government taxed is continually beinl,!

; with its inability to find full employment for everyone.

No concrete suggestions seem ever to be made about the line of solution.

Even a highly developed indus trial country finds it difficult always to keep employment at a satisfactory level, though it has the tools of managed in flation so that it can within limits put out purchasing power by monetary means to support production for internal con sumption·.
This Government, or any Gov- investors into circulation ernment in British Guiana cannot put more money than ·1.he country earns by its exports, or saves by reducing the need for imported goods, or persuades overseas to spend here.

As I have already indicated, one of the answers is that we should make or grow more of the things we at prest!nt import.

This will employ more people here, but it requires a mobilisation and use of local savings.

The Government is encouraging this as much as it can.
Another answer is that the Government should get as much overseas capital as it can to spend on development works which will employ local labour during construc tion and produce recurrent income after the construction period.

Here again the Government is doing what it can, as I shall show when I deal with the develop ment programme for 1959.

The next answer is the injection of private overseas capital, which the Government wishes to encourage.
Finally is the need for our existing industries to expand and increase their production for export.

2 2.

How all this will work in 19 59 is reasonably clear.

As I have said, we hope that there will be an increase in bauxite production, both calcined and metal grade, and that at least some of the reduced labour force at Mackenzie and Kwakwani will be restored.
There will be a larger area under rice cultivation, but a good deal depends on the weather if production is to be maintained at the high 1958 figure.

As regards sugar we know that part of the crop will be sold at a higher price.

The price for the rest io anyone's guess, but all in all there is no reason for assuming that cultivation will be less than in 1958.
On the construction the side, there will be no decrease in labour force engaged on the Government financed drainage and irrigation or other In the private sector the public works.

work on the construction of the alumina plant will proceed, and indications are that construction work on the manganese undertaking will be accelerated.

As re gards new works, there will be the in stallation of the bulk sugar loading plant, and new electricity generating plant for the Georgetown undertaking.
As regards new industry there is the hope that now an agreement bas been signed for the 85 Budget 8 TH JANUARY, 1959.

Statement 86 setting up of a wood pulp undertaking, construction will begin on that, a major work.

-Finally there are signs of increased activity in small scale diamond and gold mining.

23.

The key to all the problems of finding work is investment of local and overseas capital.

Without that the Gov ern ment can do nothing.


If this is wrong, and there is another solution, then the Government would be very happy to hear of it.

But the Government is hopeful that capital investment will be found am!

will make every effort to find it.

Financial Outturn 19 58 24.

T must now deal with Govern ment finance in 1958 and the out.turn of the year on the recurrent budget.
1958 has been a strange year from the point of view of Government revenue, and l have already ou tlined the economic facto rs to which th is can be attributed.

The estimate for import duties was just over $16,½M, that is an increase of $600.000 over the a pproved estimate for 19 5 7.

The year started off reasonably well, though a t the end of March we were slightly be hind the 19 5 7 figu re, whereas of course we should have been slightly a head if we were to achieve the increase on the year.
By the end of June, however, the posi tion was considerably worse, and we were nearlv $300,000 below the 1957 figure, and bv the end of August, we were near It was the same ly $ 700,000 behind.

story fo r rum duty; despite the lOo/o in crease in duty, by t he end of September we had collected less in 19 58 than in 195 7.

From October.
From October.

onwards, however, both import duty and rum duty staged a remarkable recovery, so much so that Customs and Excise revenue as a whole, which on the picture in the middle of the year , might well have been $2"1 uncler the estimate.

will now be only about $1M Im ports of consumer goods and less.

the consumption of rum are obvious touchstones of spending power.
There is no doubt that the cutting back of orders fo r imports at the beginning of the year was conditioned by the two successive bad rice harvests in 1956 and 1957.

In 1957 in particular the economy had been bol stered by large new construction works such as the Alumina Plant, and by the larger production of sugar, but the cumula tive effect of the bad harvests and the effect on the national income could no longer be contained in 195 8.
People spent less-they had to-and importers were obviously uneasy as there seemed to be a prospect of yet a third bad rice harvest.

N aturally, they cut down on their orders.

T he fall in receipts for rum during the same mid-year period was obviously due to though there is no doubt that the immense suc cess of its p,roduct affected the consumption of rum ancf dol lar for dollar spent on beer or rum , about four times as much comes to Govern ment revenue from rum.
the same economic factors, the brewery and ~ a 2 5.

From this picture at t he end of, September, however, brighter one emerged, and it is clear that the businrss community took hope as hints of a very good rice harvest got around.

Orders were placed, more money was spent and Government revenue started to rise again.
As I have said , by the end of the year the position as regards customs and excise revenue, though not satisfactory ~im:e the terrific shortfall in the first nine months of the year, could not possibly be made up was not as desperate as it appeared at one time it would be.

submitted by 26.

On the other side of the picture the Income Tax revenue is likely to be some $3M more than was esti:inated.
I have tried very hard since I have been here to make a better Income Tax esti mate, and have consistently increased the figure t he Departraem, which is based on returns of probable tax in the following year submitted by major One would have groups of taxpayers.

thought that things would even them selves out over a period of years, some t imes the optimistic figure being justified, sometimes not.
But in recent years even the optimistic figure has turned out to be too low, and this has happened again in This is not of course uniqui to 19 58.

It is a most difficult British Guiana.

estimate to make.

A large elem~nt in the I 9 58 increase is the collection which has been made in respect of previous years' assessments, and I do not believe that this amount will be as high in the future.

87 Budget 8TH JANUARY , 1959.


Statement 88 [THE FINANCIAL SECRETARY] It is now obvious, however, that trading conditions in 19 S 7 were much better than anyone had thought, and it was a more prosperous year for all sections of the community than available figures for the year led one to believe.

to 2 7.
to 2 7.

To conclude this general state ment about the unusual pattern of Gov ernment finance during the year I must the extraordinary expenditure refer which had to be met because of the breach of the sea wall at Enmore.

This cost was above $¾M, which of course could.

not have been budgeted for.


Neverthe less so good was the income tax figure that we have been able to contain this unexpected expenditure and the short fall in customs and excise and still pro duce the $2M surplus we set out to get for the Development Fund.

19 58 Revised Estimates I i ~· 28.

I should now like to offer some the 1958 more detailed comments on Revised Estimates.
The approved re venue estimate for 1958 was $47,892,000 and the Revised Estimate, as printed, is $49,196,000-an increase of $1,304,000.

I have already spoken about the Customs and Excise figure which is about $1 l\ 1 down, and the Income Tax and other In ternal Revenue which is about $3M up.

We are, however, likely to be $300,000 down on the receipts expected from de partmental fees and schemes.
The re venue from Housing, for example, is likely to be $50,000 less than estimated, and from Land Settlement schemes $148,000.

Tlle estimated receipts from the sale of P ure Line Seed Padi are $142.000 than was originally thought, but so was ex penditure from voted money.

There will also be shortfalls in the rdnnds of loans made from Colony somces because the receipts from sale of liou5e.,; were again over-estimated.
On the credit ~ide, how ever, we have received $80,000 from the Currency Board profits which we never expected to get, since on probable interest trends at the time the Estimates were framed it appeared that the whole of the 1957 profits would have to be applied to 1the Curr.ency Fund.

There is also an less accounting refiJnd of $176,000 from the University College because of the change in its financial year with the setting up of the Federation.

there b e en 29.
there b e en 29.

The revised estimate of expendi ture shown in the printed Estimates is $47,478,000 or $1,586,000 more than the original estimate.

This is considerably less than the total of the original estimate.

provision which plus supplementary the year, has been necessary during because under has spending in certain departments, parti cularly where there are still staff vacancies, although I made an allowance for this when the 19 58 Estimates were prepared.
The Agriculture head is expected to total nearly $400,000 more than the estimate because of the increased deficits of the marketing schemes and the extra money which has been spent during the financial vear on the Pure Line Seed Padi Scheme.

A very large increase is inevitable on the Miscellaneous head which will probably be exceeded by $800,000.

$200,000 of this is required for the subsidy to the Rice Marketing Board with the change in rice prices last year.
Refunds of revenue will be $170,000 more the estimate- though this is offset by the Income Tax Collections and $200,000 extra is required for leave pass ages for Government Officers.

The only other significant increase is the one which I have already mentioned, that is the $750,000 the emergency measures which had to be taken a t Enmore follow ing the breach in the sea defences.
l should say, however, that at the last minute an application for supplementary provision of $7 5.000 has become necessary I men for P1imary Teachers' salaries.

tion this here to draw particular attention to the fact that teachers· salaries are go ing up at an alarming rate.

Even the original estimate for them is as much as $4,285 .000, and it is even more obvious now that the cost of the revision of teachers' salaries in 19 5 7 was verv much under-estimated.

for previous years - than for · 30.


However, a ll in all.

the year has not been unsatisfactory as far as Govern ment revenue is concerned, though the satisfaction has come from quarters other than those from which it was expected.
89 Bitdget 8TH JANU ARY, 195f• Statement 90 The printed estimates show a surplus on the year's working of $1,718,000, but since they were printed various increases in actual revenue have more than offset the probable the expenditure figures, and I feel that as a result of the year's working there should be a surplus of something like $2M as budgeted, for transfer to the Development Fund.
increases in to 31. final I may say that among the minor disadvantages of presenting a budget as late as this is that a ll the time one is figures, and an getting nearer estimate which looks brilliant as a shot in the comparative dark of September may look unnecessarily wide if made in what should be the bright light of early Janu It is not however possible even at ary.

this stage to be absolutely right about 1958, because of the major end-of-year expenditure adjustments to be made.
However, as I have said, it looks as if $2M will be available as planned , for ,he development the rec urrent budget in 1958. fund, from The General Revenue Balance 32.

When the $2M is so transferred, the general revenue balance will remain at just over the $5.16M at which it was brought forward from 19 5 7.

The surplus on the 19 5 7 working was some $700,000 higher than I had thought it would be when the 19 58 budget was presented.
revenue being roughly $200,000 more and expenditure $500,000 I had predicted, and the whole 1957 surplus of $2 .6 79M has already been t ransferred to the Development Fund.

than less 33. that repeat I must again the general revenue balance at just over $SM It is really little is in no sense a reserve.
more than our working capital require ment, and it cannot be regarded as a fund into which we can dip to finance items which have not been budgeted for; it cannot be regarded even as a nest egg, for any surpluses which accrue on a year's recurrent budget have to be applied to the development or capital budget to re duce our need for borrowing, and not reserves.

The added .smallness of the general revenue balance does however make life difficult for those to our so-called through the year.
of us who have to run the day-to-day finances of Government, particularly when we have a revenue which is unevenly dispersed In the early months of the year we spend more on the recurrent budget than we receive in revenue.

is alleviated The posi tion somewhat in June when we receive the first third of company income tax, but then we go steadily into deficit again till the beginning of November when the balance of the company income tax is paid.
Then onwards till the end of the into ~urplus, increasingly year we go helped by the la rge weight of customs and excise duty which falls in the last two months of the year, when receipts in this sixth of the year are more than a fifth of those for the whole year.

J4.
J4.

the I feel obliged, at risk of wearying Honourable Members, to reit erate what I said last year about the wrong conclusions which are drawn by representative members of the public, and the press, from the Government re venue and expenditure position as shown by the end of October figures.
Despite what I said in last year's budget speech, we have again seen and heard statements that the deficit at the end of October, and the low revenue collection till that date, revealed a very serious position, that there was likely to be a large deficit in the year's working since revenue wa5 so far behind on a proportionate basis.

The figure of $61\1 was quoted.


Yet the position in 1958 at the end of October was no different from that of any of the past four years when we have finished the year with excesses of annual revenue over annual expendit ure of $1 .6M in 1954 and 1956, $2.Sivl in 1955 and $2.7M in 1957.
And we are going to have a surplus in 19 58. being I venture to say that this is typi 35. cal of the sort of pessimism which ;s in public continually reflected statements, some of which are meant to be taken more seriously than others, but all of which are more or less damaging to If we do not the country's appear t o have any confidence in our own economic position how can we ex There pect people outside to have?

interest.
interest.

91 lhdget 8TH JANUARY, 195\l Statentent 92 r .., seriously [THE FINANCIAL SECRETARY] was one prediction produced a few weeks ago in a newspaper, that we would bor row more in 19 59 than we, would ever I do not know how seriously repay.

meant I this was, not too imagine, but it is the sort of humour whiGh Gannot possibly help in the quest, which is as difficult or more difficult even for us than for others, for loan money and investment.
And there is not the slightest evidence for such a prediction, We have also, for example, seen the gluw reports that this was the worst Christmas ever from the point of view of money in cin:ulation.

This is not borne out by the actual figures for money in active circu lation which were $16M for November 1957 and $17.ZM for November 1958, or by personal observation of what has been going on for the last weeks of the year.
The Government is also contin ually being taken to task for not rushing into things which may benefit the coun try but which, from their very nature, rf: quire considerable thought before they are ready for judgment as being in the best long-term interests of the country.

I 36.

The opposite facet of the same pessimistic visage that when some is thing is said which shows that the coun try is not going backward, that its future is eGonomically bright, no one makes anything out of it.
refer particularly to the statements made by the recent m1ss1on of Bank.

They were most encouraging and stimu lating and made by an expert of wide ex independent perience, keen observation, I should standing, with no axe to grind.

have thought that this would have been shouted from the housetops so helpful was it nationally, but very little has so far been made of it.

International the 37.


It may be that the Government itself has not done enough explaining of the country's financial and economic pos ition, and we will try to rectify this.

But the fact remains that what any Gov ernment says has mu<!h less effect that if the peo,Ie and their press say it, for the outside world will listen to them.

· I am not suggesting that everyone should say It _is not .and that everything is rosy.

is still a very much British Guiana It still has to under-developed country.
rely on too narrow a base, and this means that there will be the set-backs and pauses from time to time to which I have already referred.

I do not suggest that there is not a good deal of poverty, that some people are unemployed or under-employed.
But I do believe and know there are many countries where the position is a good deal worse, It is clear that for the large mass of the population here the standard of living is comparatively high and equally clear that if this trend is to con tinue we must instil the confidence of the outside world in our economy and build up our own.

rising, that and 38.

This seems a particularly appro priate point for me to describe to you the state of the public debt at the end of 1958. for bidding.
It is substantial but not fund towards Public Debt 39.

The funded public debt at the beginning of 1958 totalled $54.6M, of which $4S.3M had been borrowed in the United Kingdom and $9.3M in the Col ony.

The sinking the amortisation of the $54.6M had accumu lated to $8.9M at the beginning of the In addition year.

long-term this to debt we owed $6.6M to the Crown Agents Joint Consolidated Fund which it had been intended to convert into a long-term United Kingdom market loan as and when opportunity offered.
As is now well known, conditions in the Lon don market have not proved propitious for Colonial loans and as a result Her Majesty's Government came to our aid in mid-1958 and agreed to make a Gov ernment-to-Government loan of $26.4:M to underwrite the borrowings from the Joint Copsolidated Fund which are on call, and to provide a margin to enable the 19 56-60 Development Programme to proceed more or less on the lines planned through 1958 and 1959.
By the end of 19 58 the Joint Consolidated Fund bor rowings stood at about $14M and we had used from the United Kingdom Gov ernment loan $7 .SM, as well as relying on its backing for the $14M advanced by f • I · 93 B udget · 8 11'T-I jANFARY, ] 959.

Statentent 94 This in 19 58. than usual the Joint Consolidated Fund.
Our pub lic debt at the end of 19 58 is therefore in effect $76.lM, and in the course of the year we shall have contributed $1M to the sinking fund, bringing the accumu lated total to over $10M.
The public debt is therefore now equivalent to about eighteen months' ordinary revenue which is by no means unusual or cause for alarm, even though it will have increased more is because expenditure on the development programme has been higher than in the in past, particularly iu which we get no assistance under the Colonial Development and Welfare Act ; mainly the large drainage and irrigation works at Black Dush where work is well telecommuni ahead of cations.
the to effect of this later when l deal with the Development Estimates, and it is suffi cient to repeat here that our public debt is still not abnormally hi::(h, and there is no reason why its service car,not be borne without serious sacrifice.
schedule, and those sections I shall be referri ng Recurrent Expe11dit11re in 1959 40. lt is now necessary for me to give Honourable Members an outline of the estimates of recurren t revenue and expenditure, which we shail lie discussing in much greater detail in Finance i; om mittee and in the debate on this i\JOtion.

The total estimated expenditure in 1959 is $47,100,000, an increase of $ 1,208/)00 over the approved 1958 Estimates or $378,000 less than the 19 58 Revised Ex penditure Estimates.
The policy has continued of pegging as far as possible Government spending and the size of the Civil Service.

Honourable Members will have seen that there are again very few new posts proposed, though staff has not been reduced to any marked extent.
This process of stabilising the size of the Civil Service has now been going on for two or three years, but even now the ratio of the cost of the Civil Service to the recurrent expenditure generally, is higher than in other places with econ omies like British Guiana's.

41.

As regards the Heads of expendi ture, there are the usual inevitable in creases.

The biggest is of increase course on the Public Debt Head where there is an increase of nearly $700,000.
This is necessary to service additional borrowing which has been made in 19 58, and that projected for 1959, mainly of ::ourse the £5 \12 M. United Kingdom Ex chequer Loan.

The terms of this loan are not yet known but it appears that the rate of interest will be ¼ % above that at which the United Kingdom Government can borrow.

The method of repayment is not known, whether it is to be by annuities o r by a sinking fund method.
The estimate is therefore made on certain assumptions rather than definite informa tion, but it is unlikely to be very far out.

Social Services will cost more, as is inevit able with the growth of population at both ends of the age range.

Increased cost of education is going to be something like $½ M. The largest part of this is con tained in the Primary School Teachers' salaries which will cost $315,000 more, and there is an increase of $124,000 it\ the vote for grants to aided secondary schools.
The cost of Primary School teachers' salaries is now assuming formid able portions and at the level of $4.6M they take 10% almost of the total Colony expenditure, and of course as the number of school children increases so will the number of teachers.

For the rest of the social services there is an increase of $200,000 on Health Services and of $80,000 on Social Assistance proper.
In all other Departments, however, the esti mates have been kept down to the lowest possible figure in view of the revenue position in 19 59.

It is a particular dis appointment that the estimated deficit on Transport and Harbours should have in creased in 1959 despite the large amounts spent on rehabilitation during the past thorough economic few years, and a appraisal of the railways is called for as soon as possible.

42.
42.

Apart from the normal scrutiny of the departmental expenditure estimates there has had to be a further pruning, and Members will see that the amount of extraordinary expenditure in 1959 is very small i.e.

expenditure on imported ma chinery, equipment and the like.

43.

The Government also felt that in a year of financial difficulty it was neces- l ~ -~s Budget 8TH JANUARY, 1959.
Statement 96 [THE FINANCIAL SECRETARY] sary to make certain arbitrary cuts in Government expenditure even if they did result in a slightly less efficient operation of Government.

One such cut is a 10% reduction in all departmental travelling votes, that is a 10% reduction on what It is not the Department had requested.
felt that a reduction in the amount of travelling done will impair the Govern ment se:rvice to a marked extent; indeed, if the utmost economy in transport is sought by the Departments concerned there may well be no real loss in service.

An arbitrary 10% cut has also been made on all departmental Miscellaneous votes.

Here again, it is felt that there is ground for economy in day to day petty expendi ture on office maintenance and amenities, miscellaneous small items of equipment and the like.
The total of travelling and allied votes in the Estimates was just over $IM so the saving on this is about $100,000 and on the miscellaneous votes which total $155,000 the saving will be $15,000.

These do not sound stagger ingly large amounts but there are very useful ones and an economy drive in any Government Service is from time to time very beneficial, particularly if it encour ages the Service to have an economical attitude of mind in dealing with expendi ture as a whole.
Because of the finan cial position we have also had to reduce maintenance standards in some cases.

I am happy to say that this will not be so in the case of the roads.

Honourable Members may think that such an exer cise would in any case be impossible.

But we have given a smaller increase for the maintenance of buildings than the Public Works Dept.

would have liked though as Members will see the vote will be larger in 1959 than in 1958.
Again, for reasons of economy it is planned not to increase the stock of the Public Works Depart ment Stores in 1959.

We were working to increase the total value of the stores from $750,000 to $1,000,000 but the progression will have to wait a year.

Even with these economies in expenditure how ever, it has not been possible to find the usual amount for Loans from Public Funds or for the Public Works Non Recurrent Programme.

The Government has felt obliged to reduce the vote .
for loans by $90,000, though the real reduc tion is only $30,000, since the 1958 figure included a revote for the loan to the Georgetown Town Council for the re habilitation of the Sussex Street canal.

The figure provided for Public Works Non-Recurrent is $165,000 less than in 1958.

As I have explained on former occasions it is a strain to carry a large Non-Recurrent Programme as well as a large Development Programme contain ing expensive capital works.
The figure for Public Works Non-Recurrent is essen tially a residual one but the amount pro vided should not mean in itself a reduc tion in the labour force used by the Department.

Also on the decrease side Honourable Members will have seen that no provision was made for military ex penditure in 1959, either towards the cost of the United Kingdom Troops who are posted to British Guiana or for the West India Regiment.
The position with re gard to payment for the British Company which is here is the same as when it was last debated in this House and we have not so far been asked to pay anything.

R ecurrent R evenue in 1959 44.

If I may now turn to the Esti mates of Revenue for 1959.

It has been a most difficult exercise to assess what the revenue is likely to be in 19 59 on the present basis of taxation.
I have already described the peculiarities of Government revenue in 1958, whic;h stemmed from a lack of spending power in the early part of the year because of the rice harvests and the aluminium recession, and how the last quarter of the year staged a recovery mainly because of the record rice and It is impossible to say with sugar crops.

any certainty or even with as much con viction as usual what the revenue next year will be.
What is quite certain, how ever, is that the Income Tax revenue will not be as much as it was in 1958.

It will be quite obvious to anyone, even if he does not know the actual figure, that there will be a drop in Income Tax from all major mining and sugar industries.

The sugar industry did of course have a very good year in 19 5 7 because of the very high world price of sugar for months in that year.

The average price in 1958 has, f I ~ ~ 97 Budget 8TH JANUARY, 1959.
Statemen.t 98 however, not been anything like so high as the abnormal one of 19 5 7 and though increased production would have the helped a bit, the tax from the industry probably will be more or less back to It is also obvious that if normal in 19 59 .

less bauxite has been exported in 1958 than in 19 5 7, then the income tax from bauxite will be less and of course the fall in tax is greater in proportion than the fall in volume of exports since certain overheads have to be carried.
whatever the production.

We also know that the large amount of tax which was received in 19 58 in respect of previous years assessments will not be repeated in 1959.

These things are known.

The imponderables.

however, can have even more weight than usual in 19 59, but one must assume that trading profits will not be any higher in 19 58 than they were in 19 5 7, because of the depressed trading conditions in the middle of 19 58.

As a result the income tax revenue is estimated at $14,750,000.
that is $1 ,500,000 less than the original 1958 estimate.

45.

As regards customs and excise revenue, an increase of $IM over the re vised 1958 estimate has been assumed on This may be optimistic import duties.

but it seems reasonable to take a figure of $16,800,000 having regard to the actual collection of nearly $ 16M in 1957, and the improved tendency in the last quarter of 1958.
Here again much depends on the results of the 1959 rice harvests and the speed a.t which the bauxite and to a lesser extent the timber and other extractive industries recover from a rather depressed state in 1958.

Export duties are expected to be about $90,000 higher than in 1958.

These are almost exclusivelv on bauxite exports.


Excise on rum has· been put at about $300,000 more than the actual col lections in 195 8. but $32 5,000 less than the original Small increases are expected on the other customs and excise items, and as a result the esti mate for the whole head is about $300.000 more than the original 1958 estimate.

estimate.

1958 46.
estimate.

1958 46.

I have very little comment on the rest of the 1959 revenue estimates, the only noteworthy increase being one of $350,000 on our share of the Currency Board profits because there should be a normal distribution in 1959, the market value of the Currency Note Fund Securi ties having risen substantially during 1958. is in figures 4 7.

The total estimated revenue for therefore $47,100,000, that is 1959 about $800,000 less than the 19 58 original figure.
With a public works non-recurrent expenditure of $585,000 the budget almost exactly balances.

No provision is how for any ever made these increases which may be recommended by the Salaries Revision Commissioner.

It is not yet known what the recommendations will entail, but it would be unrealistic to assume that they could be implemented without expenditure.
However it has been decided to leave this question till the Report has been received and studied, by which time we should have a clearer picture of the 1959 fman cial position.

additional some to show 48.

There is also no surplus for a contribution towards development expen diture in 1959, and it will be necessary for me it would be impossible to leave the position at that.
Before doing so however I must give some account of the position of the development plan and its financing in 1959. later that D r.vela p·m.ent Expenditure 19 5 8 expenditurt 49.

Development in 19 5 8 has been very 111 uch on the lines of the approved 1956-1960 plan.

The original estimate for the year was $23 .8M and the revised $2 1.81\1.

If the revised estimate is accurate the expenditure will have been higher than in any previous yea r: $20.61\1 was spent in 1956 and ~18.4:\I in 1957.
A main reason for the high expenditure is that the drainage and irrigation work at Black Bush is well ahead of schedule because of the dry year we have had.

The expenditure on this work alone in 19 58 will have been over $4M against an original estimate of $3;/2 M which on past perfom1ance of similar works I frankly had considered optimistic.
Indeed the estimate for the other major drainage and irrigation work in progress at Boerasirie did prove too high by some $.SM and the main works there are not now expected to be completed till towards the end of 19 59.

The problem then will be to find money for its internal works.

1 99 Budget 8 TH JANUARY, 1959.

Statement 100 [THE FINANCIAL SECRETARY] As regards the Black Bush Area however.
there is every likelihood that 2,000 acres will be ready for occupation and culti vation by the end of 19 59, with a possi bility of a further 2,000 acres if the land can be deared.

The problems of settle ment are now being worked out.

regards 50.

As land development itself the main work has been at Mara where four-fifths of the drainage and irri gation works will have been completed and 1,100 acres cleared by the encl of 1958 .
By early 19S9, 100 families will have been settled each with its rice cultivation and homestead plot.

It is most unfortunate that the autumn rice crop of 4 72 acres was badly affected by blast disease.

but the settlers a re not discouraged and con tinue determined to make a go of the settlement.

51.

The basic agricultural develop ment programme has continued according to plan.
The Central Agricultural Station at M on Repos is now complete except for the construction of the central laboratory and the capital part of the p resent stage of development of the livestock stations at Ebini and St. Ignatius practically com pleted.

As regards fisheries the Cape St. Mary has continued to collect valmible data through the year and has incidentally brought in an average of about 50 tons In new of fish a quarter while trawling.
crop development, cocoa of very good quality has been produced but it has not so far been possible to get seedlings taken up by small fanners to anything like the desirable amount, and ways will have to be found to encourage the pla nting of this very promising crop.

The experimenta 1 jute cultivation has had a negative year in that it has been virtually proved that jute will not grow satisfactorily except in fron tlancls clay soil, and the next .stage of developn,~~ very careful 't:,NTARY Lt~ , .
thou~ # On the commurn~ 1 1s side the improvements to the W~1 and East :8(st railways have continue!k During a new launch for the Ca je River .~ :rvice was built locally a nd b ught into ferry boat '· ... jd in ~ f l .Oct er 19 58 ; work se~ice, and the keel of a· ne t{~ I on its sister ship will begin in Georgetown about March.

Work on the modernisa tion of the ferry terminals a t Georgetown and Vreed-en-Hoop will begin this year.
As regards telecommunications, the new Georgetown Exchange Building has been completed and work on the underground rluct svstem begun.

The exchange equip ment is now arriving both for Georgetown and for the several exchan ges on the coast and in t he Interior.

Exchan ge buildings ha·,,e already been completed at several centres including Anna Regina, Leonora and Suddi e. Work on road investigation and road building proceeded.
The major investigation of 1958 was the full dress survey of the East Coast Road .

It was with some sense of desperation that we re ceived the news that to build a first class road of the type planned , from George town to Rosignol, would cost something like $¼M a mile on the average.

The decision is a difficult one but it is clear that we cannot envisage spending t his amount of money on an existing route, except perhaps over a protracted period.
A modified scheme is however now being worked out and in the meantime we must continue to be patient.

As regards the East Bank Road, steady progress has been made with deviations and the road is now in better condition than for some year~.

The sealing in many parts is however still temporary and the next stage will he the real surfacing of the road.

Surveys of the interior roads have also continued thr0t1gh the yP.ar .
Expenditure on sea defences has been higher than usual even excluding the $¾M spent on the recurrent budget.

53.

On the social services side 1068 houses were completed during 1958, and a further 606 were 95% complete at the end of the year a nd will be ready for occupa tion early in 1959.

E leven more schools were either extended or given a new lower flat in 1958, and the extension of eight On the Health more was in progress.
side, the new Central Medical Store was completed during the year and the final instalment, the water supply, made to the Port Mourant Hospital.

Financial background to the Programme 54.

It will be more convenient for me to deal with progress in certain other 101 Budget 8TH JANUARY, 1959.

Statement 102 main sections of the programme, when I talk of the 19 59 programme, but before doing this it is desirable that an account should be given of the financing of the programme as a whole.
As I have said the total expenditure on the development budget in 1958 will have been something like $2 l .8M.

It is not possible to guaran tee this figure at the moment, and ones instinct warns that it may have been somewhat less.
It appears however that a programme of this sort of size has been financed by the budget surplus to the extent of about $2M, by Colonial Deve lopment and Welfare grants of about $2¼M, and by Loan Funds either from the Joint Consolidated Fund or the United Kingdom Exchequer Loan, and by the temporary use of the General Re venue Balance and deposits pending the raising of a local _loan to the extent of about $17M.
The actual drawings from the the $26.4M Exchequer Loan and Joint Consolidated Fund to the end of the year were as I have said $21.5M, but of this $6.6M had · been used in 19 5 7, and they would have been about $3M- more if we had not received funds on deposit local for investment- · loans in 1959. the projected in 55.

The disappointing feature in this pattern of financing is the comparatively small use made of Colonial Development and Welfare funds.
The territorial alloca tion was increased by $1M during the year which means that at the beginning of 1959 we shall still have about $6.SM of the allocation unspent with the prospects of a new Colonial Development & Welfare Act coming into effect sometime in the year.

We had expected that the propor tion of C.D.

& W. funds on the 1958 expenditure would have been some $2M higher and that there would be no diffi culty in spending the allocation by the end of 1959.
What has happened how ever is that some schemes which had been earmarked for C.D.

& W financing, some where the Secretary of State had actually approved C.D.

& W. schemes, have not proceeded as quickly as expected for various reasons, some outside our con T his has meant that some of the trol.

allocation has been earmarked for schemes which might have been used- for others which we have been financing from our loan and budget sources.
This sort of thing is of course inevitable in develop ment financing, and we are hOW making an effort to adjust the position.

The other main difficulty against the quicker utilis ation of C.D.

& W. money is that in the schemes of economic development such as roads, sea defences, minor drainage and irrigation works, we have to find half the cost from sources other than C.D.

& W., and the money is spent pari passu.


If those other sources are not in full flow therefore, that is if there is a shortfall from the the sources of finance for planned programme, then obviously the amount of C.D.

& W. money which can be utilised on the SO% basis is also limited.

56.

I have referred to this at some length because it has considerable bearing on the shape of the 1959 Development Estimates, which are now before Hon.

The estimates show a total .

Members.


expenditure of about $21.5M which is regarded as a reasonable physical target on past performim,<;e. But at present there is no guarantee that ~tinds will be avail1J,ble to finance · a year's programme of this size.
As it · will be remembered· following the London finance ·talks in ·mid- 1958, an Exchequer loan was p;ranted to enable the programme for 1958 to be continued, and it wa-s also considered by the Secretary of State to be sufficient, with the full use of C.D.

& W. and local re sources to meet practically the whole of the expenditure which proved to be need ed for the present plan up to the end of 1959.
The "proves to to be needed" was contingent to a large extent on the ele ment of uncertainty in the estimates of likely expenditure and resources.

In par ticular, of course, this meant that it was uncertain that the revised estimate of ex penditure made in June 1958 would be reached.

In fact as I have said, expendi ture is likely to ha:ve been arc;mnd that figure and, as -~.
result; ·considern.ble si!mi ficance is assuin"ed by the shortfail';of $2M which thir~:-was in the Exchequer .Loan compared •with the estimate of need\ dis closed by an estimated 1958 expenditim~ of $21.674M and a 1959 estimate of $18.237M, with an assumed yield from budget surplus and-: loans !aised locally.

103 · Budget 8TH JANUARY, 1959.

Statement 104 [THE FINANCIAL SECRETARY] Not the least effect of this is that it inhibits the spending of part of our re maining C.D.
& W. allocation for the rea sons which I have already given.

57.

So this is how things stand.

The Government puts before you estimates totalling $2 l.494M of which $6.42 7M would come from: C.D.

& W. free grants and $15.067M from other sources.

Be cause there is not foreseeable finance for this very reasonable programme however, we have shown certain items in the pro gramme as reserved ..

This means that work cannot be started on them or if only part of.
the vote is reser-ved, the rate of spend ing must be geared to the free amount excluding The amount so reserved.

within the $2.1.494:M is $3.78M of wbieh.

$1,939,500 .

is fo ... the· C.D.

& W.- element and $1,840,500 in the: other resources part.

The unreserved part of - therefore $17.714M, consisting of $4,48.8M from free C.D.

& W. grants and $13;227M from other· sources.

Hon.

Members will have noticed that the $4.488 C.D.

& W. ele ment is ·less that the amount of our a,lloca tion remaining to us.
the reserved portion.

the draft estimates is · 58.

As regards the other resources required we are .counting on raising at least $6.5M in local loans during the year.

This ·may seem a large amount, but it must oe taken into account that we shall· be eligible for a borrowing of some $3M from the ·Eastern Caribbean .

Currency Board under the scheme embodied here in legis lation passed in 1957 but which has to be enacted again because of a legal techni cality in the model ordinance.
It is also proposed with the advice of the Secretary of State to · do a gradual switching of overseas investments of local funds such as those of the Post Office Savings Bank to local investments, subject of course to the legal limit in each case.
The invest me.nt of these funds in local securities i5 still far from the statutory limit so there is scope for such a switching operation With reasonable response from local com panies and individuals at least $6.5M should be feasible, including the amount on deposit at the end of 1958 awaiting I ~ t investment.
Excluding this $3M the new local loan money can therefore be taken as $3.5M and in addition there will still be $4.9M left from the Exchequer Loan giv ing us $8.4M the unreserved towards estimate of $13.227, from sources other than C.D.

& W. grants.

I shall be deal ing with new taxation proposals shortly which are expected to produce a $2M sur plus in 19 59 thus increasing our estimated resources to $10.4M.
The gap would therefore be $2.827M and it seems rea sonable to assume that this could be filled partly by a small increase in · the local loan element, partly by an adjustment between C.D.

& W. and loan expenditure, for remember there will still be about $2~1 available in our allocation over the $4.488 in the estimate,· and it is certainly reason able to budget for the amount of $17.714 anyway, on the theory and practice of "slippage" .

As I .have often said in this.


Council, particularly when there has been criticism of budgeting in· the development programme for more than we in practice spend during tlie year, or drawing up a programme'for·a period which appears too large, if you want' to spend a hundred dollars you must aim at · spending a hun dred and ten, because of the inevitable lag in performance.

Some things go more quitkly than planned, some more slowly, and there must be elbow room in any capital estimates.
·1 hope therefore that the House will accept these estimates as a · reasonable basis on which to proceed as soon as possible.

As the present im ponderables are weighed,- the final size of the 19 58 surplus, the final 19 58 develop ment expenditure, the success of our efforts to get more C.D.
& W. money spent, the· results of our local loan issues, and above all, the results of our visit to London .· in · mid-1959 to discuss future financing with the Secretary of State when he· has pro mised to review our case in the light of events,- then we shall be able to dereserve, if I may be forgiven such a word, more of the items in the full year's estimates of $2 l.499M.
It is not going to be an easy year for the Treasury, we shall have to watch events with the closest a ttention , even on a day to day basis, to see that Government investment is kept at the highest possible level compatible with 0J.

!r It will ability to fi.nd the money for it.

105 Budget 8TH JANUARY, 1959.

Statement 106 be obvious to Hon.


Members that mem bers of the Government have had tem porarily to sacrifice some of their favour ite schemes, but they have faced up to this as they realise that it is the first essential that we should live within our means and not begin large schemes unless we have a reasonable prospect of being I able to find the finance to finish them.

hope that all Hon.

Members will approach the estimates in the same spirit.
The shortage of development finance is not unique to British Guiana.

Members will no doubt have seen from the latest Journal of the ,Commonwealth Parliamentary As sociation that the independent countries of the Commonwealth have their financial headaches, and that among the territories formal development programm~s, with Ministers of Finance were using such phrases as "important projects being re duced or postponed"; "development pro gramme going forward at reduced speed" in their budget speeches.

Hon.
Hon.

Members will also see that in many of the territories · covered there were taxation increases.

59.

But we must have high hopes of what is forthcoming from the new C.D.

& W. Act, and ao I have said before in this Council we have been treated most sympathetically by Her Majesty's Gov ernment and have anticipated the new Act by being granted an Exchequer Loan in advance of it.
But it still behoves us to do our share and the new taxation proposals which came into force today are an earnest of our intention to find as much as we can towards our own econo mic development.

Before I deal with this question I must briefly give the salient points in the development proposals for 1959.

Develop1nent Estimates 19 59 60.

The major expenditure will be on the Black Bush Polder Scheme.
To this we are committed, and on this, as I have said, a sizeable part of the national income increase depends.

The estimate In fact the -:on for 1959 is over $4M.

tractor's belief is that the expenditure ·may be some $340,000 more than has been in cluded in the estimates.

I do not believe however that we shall have the same very favourable climatic conditions which have to the conservancies enabled such an acceleration of the work, as has happened in 19 5 8, to continue.
In deed if I did, I should be worried about our rice crop next year, not only the Spring crop but the main crop.

We really do need a heavy rainfall to build up their normal level.

We cannot have it both ways.

Good construction weather is not good grow ing weather and we must hope for a balance between the two.
For the rest of the expenditure on drainage and irriga tion works, provision has been made for the Boerasirie main the completion of works, and for a larger programme of minor drainage works, which experience has shown pay such quick dividends.

Whatever may be said about the direct return on investment in drainage and irrigation works one must feel convinced that in British Guiana the ripples from a good rice crop have a wider reach than pure statistics demonstrate.
· The cross benefits of bringing more land into bene hcial occupation are very considerable and affect the economic well being of • many people remote from the areas of produc tion.

This has been evidenced by the effect of .

the recent good rice harvest.

Provision is also made in 19 59 for the completion of the Tapakuma Survey.

This area is the logical successor to Black Bush :md Boerasirie and its development must form part of the next five year plan.

61.
61.

Other expenditure to which we are committed is our telecommunicati.ons development.

This has unfortunately proved more expensive than was origin ally thought and doubts must arise as to its relative value at its new cost.

How ever having gone so far we must continue, albeit as Hon.

Members will have seen from the reserved list at a slower speed if this is forced upon us by financial con siderations.

62.
62.

As regards Public Work_s pro per, provision is made for the continua tion of work on the East Bank road as I have already said, and for the extension of surveys of interior roads.

We also hope to do more work on sea defences than in the past with a concentration in the Nabaclis-Strathspey area where protect1011 is urgently required.

The construction of new public buildings and officers' housing ~ 10'1 Budget 8TH jANUARY, l959.
Statent,en/, i 08 [THE FINANCIAL SECRETARY] has perforce had to be reduced minimum .

to a _63.

For Agriculture and Land Devel opment the 1959 programme represents a period of drawing breath.

It is clear that one of the major problems in any suc cessor development programme is to pro vide agricultural credit for the people who are to settle in the new lands, and until the position of this becomes clearer we have only provided for a continuation oi the present programme in its prescribed lines.
One of the key factors in the 1 960 situation will be the role of the (:redit Co~poration.

No addition to the lending capi,tal of the Corporation is provided for in 1959, but this does not mean that the Corporation will be inactive.

In 1958 the Corporation has drawn down its last the 1956-60 pro capital provided in gramme, but during the past eleven months of the year it made 44 7 loans totalling nearly $I.3M.
Of this nearly $500,000 was for agriculture and food production, over $500,000 for housing, and about $250,000 for industry includ ing logging and fishing.

It is most signi fi~nt and.

encouraging that in the same period the Corporation collected nearly $2M in repayment.
The quicker the re payments the more there is to lend, but the Government is nevertheless keen that the capital of the Corporation should be increased, and we have hopes that there :will be other sources·of finance for it, both private and also possibly from the Inter national Bank.

~ the progress of 64.

An · important adjunct to the activities of · the Credit Corporation has been rural self-help In the first ·three quarters of schemes.
1958, 95 schemes were approved in a wide category for agriculture, buildings, roads, drainage and irrigation works, at a total cost of $150,000.

It is estimated that over 20,000 families will benefit from these schemes and provision of $300,000 is made in the 1959 estimates for a continu ation of the programme.

Half the provi sion is reserved but even as it is the scheme should be able to proceed at its current level.

t'.Si I , • ~ 65.
t'.Si I , • ~ 65.

As regards the social services in 1959 provision is made for the beginning of a revised health service programme with the building of cottage hospitals at Leonora, Leguan and Mahaicony and the construction of twenty-five health centres.

It is also proposed subject to the provi sion of Colonial Development and Welfare funds to have an extensive polyomyelitis It will no doubt vaccination campaign.
have already been observed that nothing has been provided for the reconstruction · This has of the Georgetown Hospital.

however by no means been lost sight of, and considerable thought has been given to ways and means of providing a modern hospital for Georgetown which is within The our means if built over a period.

Government hopes to be able to announce its plans for this during the year.

66.
66.

In Education, provision is made for the rehabilitation and con'struction of primary schools at the 1958 level, with progress to be accelerated if additional funds are forthcoming, to twice the 1958 level.

This is of course in addition to the increased assistance to secondary educa tion for which provision is made in the recurrent estimates.

6 7.

The provision for housing has for financial reasons had to be reduced in 1959.
Unfortunately for reasons which I made clear during the 1958 budget debate the money allocated in the 1956/ 60 pro gramme has had to be considerably aug mented to complete a total of 3,200 instead of the 4,500 originally houses planned for the period.
The Government is not able to find more 'funds at this j~ncture· for direct investment in housing but it is very alive to the need for a continued housing programme, and is considering schemes by which it _ can join with private enterprise to get more houses built.

It is hoped to be able -to bring a scheme of this kind before Council dur ing the· course of 1959.

68.
68.

Ministers will of course am plify these _points and give fuller informa tion about the development estimates in Finance Committee and I will close my general description with a reference to a chal!ge of emphasis in the plan for this year.

The Government has decided that 109 Budge!

8TI-i: JANUARY, i959.


Statement 110 a higher priority should be given to the provision of rural water supplies for which $1,260,000 was allocated for the 1956-60 period and of which $797,000 is expected to have been spent between 1956 and the end of 1958. to spend $700,000 in 1959, but initially $200,000 of this will be reserved.

It is hoped New taxation proposals 69.


I have already said in connection with the financing of the programme in 1959 that it is intended to introduce tax ation proposals estimated to produce an additional $2M a year.

I hope that I have already demonstrated quite clearly that if there is not to be a serious falling off in the programme with attendant waste and unemployment the $2M is essential.
Indeed it is an obligation on the territory to find $2M a year from its own resources towards the programme having regard to the very much larger element in it which is being provided by people outside it.

If we want to develop we have to play our own financial part.
And in 1959 even if there were not this need for additional development finance, it would be un thinkable to approach the year with a budget which only just balances, in view of the small size of our reserves to which The amount I have already referred.

of additional personal taxation proposed is not an extraordinary imposition on those of us who have jobs and sources of in come, to assist those who have not, and whose future depends so largely on the maintenance of a high level of Govern ment investment.
It would have been pos sible to have achieved this by an all round rise in our import duties but this would be an unintelligent and unfair way with a disproportionate adverse effect of the cost of living and on industrial develop ment.

As for an increase in direct taxation, personal or cc,mpany, this is already high and it would be very difficult to increase the rates to the extent necessary to pro duce a substantial increase in revenue.

70.
70.

The Government therefore de cided to tax consumption not income for the additional revenue required and bas in the main selected items for duty in creases which are either non-essentials or for which ·there is a ' local substitute for the import..

The duties are therefore either purely revenue raising or partly re venue raising partly protective, and ac count has also been taken in making the choice of other potential economic social benefits to be derived, as well as addi tional Government revenue.
71.

There is also among the pro posals a set of decreases.

It is proposed to reduce the duties on the cotton fabric group and on rubber-soled canvas shoes.

72.

I do not wish to go into too much detail now about the various changes in duty as we shall be discussing them at length later, but it is necessary to explain the main points and the reasons for the choice of items.
The main re venue raising item is the increase in the duty on imported tobacco in the form of cigarettes and pipe tobacco, and on tobacco imported for the local manufac ture of cigarettes.

The duty on imported manufactured cigarettes has been raised by $1 a pound, or Sc.

on a packet of 20 cigarettes.

The duty on imported tobacco for local manufacture into cigarettes has been increased by 60c.

a pound which re presents an increase of approximately 1.8c on a packet of 12 cigarettes.
The in crease on "black fat" unmanufactured leaf tobacco has been increased by 30 The increased yield on cents a pound.

the imports of manufactured tobacco is estimated at $15,000 and on the imports of tobacco for manufacture $450,000.

The large revenue increase from such a small increase in the duty is indicative of the large quantity of cigarettes which are used every year.

In 1957 the imports of tobacco for manufacture were nearly lbs.
and on the average 400 665,000 I do not think cigarettes weigh a lb.

that anyone can say that this small addi tional taxation on those who wish to smoke is a serious imposition.

73.

The next increase is on the locally manufactured excise duties on spirits and beer.

It is proposed to raise the excise on rum and gin by the same 80c.

a proof gallon by which it was raised last year.

I have no doubt that there will be the same cry as last year that rum is always taxed.
To which my answer will be th_e same, · that it is a perfectly legitimate - 111 Budget 8TH JANUARY, i959.

Statement 11:2 on a non-essential on brought $1.90c.

SECRETARY] price and $2 .lOc.

It is inter­ can afford to spend $10M a year.


The proposed in­ of 10c a an increase and in view of the disingenuous [THE FINANCIAL measure of taxation which the community nearly crease should entail bottle about last year, misunderstanding I should I mean the say that by a bottle bottle which is now sold at varying between esting to note that the proposed is no more than the variation can personally ing price of the same bottle shops at the same time, but different which the with­ consumer out complaint.
should as a result of the new increa�e and th!\ price of tum is still a good and satisfying product.

the sell­ in various The price for "snap" rise by more than a cent seems to accept increase not really between observe very low for in duty, which one of discrimination.

the duty on imported Now this, 74.It is also said that taxing the poor man's drink, gallon.
is a stiff increase, which But even imported rum an accusa­ is taxing it is obvi­ tion which I also deny because unless ously taxing everyman's we drink, in the assume that almost everyone country is a poor man.

But this year for there is even less ground than usual It is this shibboleth to increase proposed by $6 a liquid spirits really we admit, represents about $1 a bottle.
·at its present and brandy is hardly the poor man's feels that if and the Government drink, anyone wishes to buy these expensive luxuries be prepared It is also considered for an .increase grounds between spirits from local materials turers with local labour, are imported.

from the rum and gin duty is estimated at $300,000 $50,000.
in the differential made almost exclusively by local manufac­ and those which he should not be prevented and on imported to pay more dearly The increase that there are in revenue whisky, spirits figure, for them.

gin but 7 5.

The increase proposed for the duty on beer is 25c.

from 50c to excise · 75c a liquid gallon.

per bottle-I doubt about the size of a Banks bottle­ is therefore convinced put above l_½ cents.

.
.

I am tlaat no one could seriously am sure there will be no in duty The increase or over 14,000,000 bottlei tht and logically, that this is an insupportable on the drinker in soberly gallons, the accusation in expenditure of about $250,000 has spent on beer is very im of beer if it i!

have dropped liquid gallom - the extra amount spent of the ¼ % reduc• of a really good local industry; has already will But if Hon.
Members to which I have al­ I have no doubt that will be made that this is Iil,:.ely to impede the maintain position passed on to him.

Yet it should product revenue a year.

Ir will have been paid ir 1958 $456,000 excise duty on beer.

At 50c.

a liquid gal that dut:; Ion, the 19 58 rate, this means will have been paid on over 900 OOC liquid of beer.

The amount of money which population for thf and even allowing considerable, decrease beer.
on imported ale, and stout,-imports 50% on 1957 when 330,000 were imported on beer is far in excess tion in food imports ready referred.

the accusation additional taxation progress anticipation been publicised.

look at the position they will I am sure agree that the in­ to have is most unlikely proposed crease that effect.
does not The Government believe in _duty that the small increase will, even if it is all passed on, per bottle substantially pat­ alter the consumption tern which has been so brilliantly by the brewery holiday duty on its main materials.

is excellent, the excise very low compared price basis, it is rapidly which pays ferential • or $2 .40 general on the landed cost including insurance, as compared local beer.

It is proposed the import duty on imported beer by the same 2 Sc.
so the relative position wish to say more at this stage except to that the right way to look at the emphasize small extra tax is as a con­ compa'ratively by the sumption and its amount of the consumption nature, successfully have no hesitation tional with that on rum on a and on imported beer which driving and out of the market, an import duty of $2 pre­ and on to increase freight with 50c excise venture.

I .the addi­ will be maintained.


tax, fully justified local industrial helped by its income tax it pays no import yield at $250,000.

in assessing anq because revenue I do not still achieved and not as a tax on an especially competitive The product comparatively a liquid gallon 13 Budget 8TH JANUARY, 1959.

Statement 114 -­ which by the cameras including at $36,000.

and watche">.

and canned soups, in cosmetics.


revenue raising except for onions, and is able to grow more of cassava, rice and other yield from on the will be on cosmetic.

; 77.For the final group qf revenue­ 76.The next· group of imports aids will cost a little revenue We are importing a year of cosmetics As regards of which a comparatively duty increases the Government an increase is to increase the pounds or 3c.

a lb.
a lb.

for potatoes other fresh and dried and dried canned small 10% has been added ;vhich the Government has selected for is a purely 1dditional luxury one consisting mainly of perfume, Here the :osmetics, rise in duty is 10% all round.

The main revenue increase estimated about $400,000 worth and I do not think that any member of will think it is not worth it.

But Council I do not think that the face of beauty Guiana will be altered in British fact that its artificial more.
The estimated the increases in duty proposed whole luxury group is $70,000, the $36,000 which produces foods, starch them.

The proposal duty to $3 a hundred The 3c.

is not an excessive amount those who wish to use imported and it is less than the fluctuation now occur in prices from time to time.

One cent a lb.

has also been added to the duty on imported vegetables beans and lentils.
vegetables amount is imported to the ad valorem rate and the same has been done for fruit juices, fruit, preserved jams, jellies or substitutes be produced sugar confectionery, been increas reason.. revenue The rationale here reduction raising raislng proposes duty on private and motorised is not entirely ernment considers penditure household of over $2.SM a regard to the state of the economy and the duty on imported the density is felt that a slight plieq to the importation ised means of private crease of 1 % is not as high as t.be normal rnnge of purchase no douht less than public predicted.
the.

increase trucks or lorries motor cars, not be directly affected, $30,000 and this will go spares which for various ready high.

The estimated increase in some way to offset the loss in revenue from the proposed reduction in duty on d uty yield is $l 'iS,OOO.
cotton fabrics The proposals is justified can well be made here both in a. small way and nor to spare parts for in garm ent factories, and it is obviously that the industry interest and industry This increase nor the price of should be encouraged.

The in- BO .. taxes elsewhere and is divinations had that does not apply to buses, reasonable all of which for them are being or could in the country.

has ed by 13 % .. for the same .


which duty is to be increased rriade clothing articles that an overseas on· new cars and motor-cycles curb should be ap-by 10%.

The estimated revenue from this group, allowing is $550,000.

of traffic on the roads· and it made from any material of new mechan-from this source is $80,000.

brooms and brushes, articles is al-should produce ex- 79-.

In view of the potential year is too high having furniture, of this nature has been raised bicycles.
revenue 78.I will now turn to the proposed such because at a It is worth my observing The final group of imports on in the local production of 7 % in the import motor cars, motor cvcles .of · additional The ·estimate not chocolate, in derriand of wooden and cane in the national transport.

increases so commerce increase is the ready­ reasons .

The Gov­ price, Duty on will and canvas rubber shoes.
are to reduce the duty on made wholly of cotton from in duty on items which are the fabrics for a but are 8 % and 13 % to 5 % and 10%, in order The first to reduce the price of clothes, and to remove the 5 % duty on the fre�h lady workday clothes, fruit and cornflour.

present preferential pa.rticu­ revenue raising.

of imported vegetables, to help local production increases designed incidentally group of these consists and tinned The main item here is potatoes.

tion of potatoes lbs.


a year, at a landed cost of nearly The duty is very low, either per 100 lbs.

The amount imported the low duty are anomalous is more than 19,000,000 - .

general Importa-textile and rubber shoes and reduce the rate from 9 % to 4 % to make it for these shoes which are the $IM.

possible 24c.

or 30c.

cheapest bought, and cheaper.

in a country cessions The cost of these duty con­ is likely to be $100,000.

a bit to be retailed 115 Budget 8TH JANUARY, 1959.


Statement 116 [THE FINANCIAL SECRETARY] 81.

As a result of these taxation pro posals, it is estimated that the revenue should increase by a net $1,870,000.

In addition the Government has decided, in view of the financial position to rein troduce a sugar tax in the form either of a production or export tax.

The sugar production tax was in existence from 1942 to 1952, on the basis of $1 a ton of sugar produced.
It was con ditionally removed with the 1953 budget and the Ordinance repealed.

But as I have said, because of the revenue needs it is proposed to reintroduce it from 1st January, 1959 at the same rate of $1 a ton either on oroduction or exports: The .
details are still to be worked out but the yield should be about $250,000, though as the tax would aualify as an expense for income tax, the net yield to the Government would be 55% of this amount or $137,500 and this added to the $1,870,000 gives a total increased revenue of just over the $2M required towards development expenditure in 1959.

82.
82.

As I said earlier, the Govern ment does not consider that the proposed additional burdens on the taxpayer are unreasonable, for items have been chosen with care to make the least possible im pact on the basic cost of living, and having regard to the production which is available in the country to provide substitutes for the imported articles on which taxes are increased.
I do not for one moment suggest however that this is a popular budget and the Government would not introduce it unless it were not demonstrably necessary.

83.

I have however attempted to show that 1959 is an abnormal year in a regular succession of relatively easy ones I have every hope in the past few years.
that 1960 will see a resumption of the steady progression of an annual increase in revenue on the present basis of taxa tion., ' though much depends on the d~gie~1Qf '(ecovery.. of the bauxite indus ~ · 1a&';fl\F as• direct Government revenue is oopcem!

:d .

... ,Sugar, .assuming that pro duction· .1iX,r¢a.


'intaiitea-j s!i,ould;..ihave1•a-:> income should reasonable 1959, with a slight increase in both the size and price of its ne gotiated price quota, and this will have its effect on Government revenue in 1960.

And in general, as I have said, the national increase sufficiently between 1958 and 1959 to make public revenues easier in 1960.
Looking further ahead still, the picture becomes much more promising as more land comes into production and the major new industries which have already begun construction play their full part in the economy, supported by an in creasing number of smaller factories financed by local capital.

is It 84.

The Government realises that prognosticatioµs of a .

prosperous future for the country are <;0ld comfort to in dividuals who are suffering present ad versity.
But case.s of hardship should not obscure the • fact, whieh is demon strated by the figures; that the average standard of living of the country as a whole has been rising, while we have been successful in keeping the rise in the basic cost of living to a very low figure in the past three or four years.
The thought with which I would con clude therefore is in a sense complement ary to the sentiments expressed by His Excellency the Governor at the opening of this session of Council about opposi that however politically tion.

minded anyone is in British Guiana and however much he is dissatisfied with any particular Government in power, or the country's political status at any particular time, the country has got to carry on, and more, go on developing in the mean time.
We are fortunate in that our major industries and our business life are so well run that the country does run well too.
But I think it would run economically faster if more public re cognition were given to the fact that the country is not going backward, despite pauses in its going forward such as we have seen in 1958, and if any Govern ment in power were given credit for its supporting role in the race, especially when that role depends so much on its successfully maintaining a public invest ment programme which depends very IargeJ¥,.on outside assistance.

~ i l t I I 117 Ve hicles a,id 8TH JANUARY, 1959.


Traffic - Bill 11 8 The Mlnistet ol CoJilmunity Develop ment and Education (Mr. Berni): I beg to second the Motion.

The Financial Secretary : I beg to to move that the debate on the Second Reading of the Bill be adjourned to allow the remission of the Recurrent Estimates and the Development Esti mates for 1959 for examination by Finance Committee.

Question put, and agreed to.

Debate adjourned.


TAXATION PROPOSALS 'the Financial Secreary : I beg to move the First Reading of the follow ing two Bills : (a) A Bill ihtituled "An Ordinance to amend the Tax Ordinance".

(b) A Bill intituled "An Ordinance to amend the Customs Ordinance".

These two Bills embody the tax propo sals wliich I have already announced.
They are covered by an Order in Council made tinder the Provisional Collection of Taxes Ordinance on the 6th of Jan uary, which means that from the date of the First Reading of the two Bills, that is today, the proposals for taxation come into effect.

Mr. Benn : I beg to second the Motion.

The following Bills were read the First time: (a) A Bill i_ntituled "An Ordinance to amend the Tax Ordinance", (b) A Bill intituled "An Ordinance to amend the Customs Ordinance".
MOTOR VEHICLES AND ROAD TRAFFIC (AMENDMENT) BILL The Minister of Communications and I beg to Works (Mr. Ram Karran): move the Second Reading of the Bill intituled: "An Ordinance to amend the Motor Vehicles and Road Traffic Ordinance".

This Bill, notice of which was given on the 29th of December, 1958, seeks to amend the Motor Vehicles and Road in several aspects.
Traffic Ordinance First of all it seeks to· restrict the classi fication of motor cycles to two or three wheeled vehicles, and to extend the definition of "road" to include wharves, 1 ~ stellings and parts of the for¢shore to which the public has access.

It will be remembered that ql,lite re and this Council discussed cently adopted a Motion moved by the hon.
Nominated Member, Mr. Tasker, asking that steps be taken to reduce the hi.cli incidence of accidents on the roads, many of which resulted either in loss of life or serious injury to persons.

The Bill seeks to place a limit of seven days on the time within which the owners of vehicles must notify Licensing Officer of changes relating to their vehicles which affect the accurac~ of entries in the register of vehicles kept by the appropriate authorities.
Clause 4 seeks to limit the amount which may be imposed by way of a penalty on conviction of a person for using an unlicensed motor vehicle, to the licence duty for tlie quarter in which the offence was committed, and makes it clear that on paying such a penalty a convicted person does not thereby ti-e come entitled to a licence.

Clause 5 seeks to require i,ersdns .

pr(?

ducing drivers' licences to the Police to notify ahy changes of address.
Clause 6 is probably controversial, in view of the fact that some people who operate motor vehicles complain that it will cause some hardship, in that Magis trates will now have the power to depriv~ a driver of his licence on a second conviction for careless driving.
The that a law at the moment provides Magistrate can only "freeze" the licence of a driver after a second conviction, but clause 6 of this Bill seeks to give a Magistrate power, at his discretion, to disqualify a person from holding or obtain ing a licence after his first conviction.

Clause 7 is probably revolutionary, in that it seeks to autliorize the prepara tion and distribution of a Highway Code for the guidance of persons rising the roads of British Guiana.

I think hon.
I think hon.

Members will agree that this is a step forward.

There is another problem with which the authorities are faced-the practice of persons abandoning vehicles at.

the If of the Bill s~:n t6 readsi<Ie.

€latis~ confer on the Police, in certain circnm.- ·119 Vehicles and 8TH JANUARY, 15)59.
Traffic-Bill 120 " staq,<;~i ·the ~power- to remove and, where necessary, pr:ovicj.e for' .custody of vehi cles left on the road in a mapner likely fo __ obstruct or cause danger to persons 1,1sing the road, and to require the owner ·of -a vehicle to pay the cost of removal and/or custody.

I think this is a long ovel'.due.


provision, and once the Police have .the power to remove a vehicle and to make the owner pay the cost of re moval and custody, owners of vehicles will be much more careful to make the roads safer for the use of o_ther people.

Of course provision is made that the Police will' · not be responsible for loss or damage to · vehicles so removed.

This legistlation is operative in the United Kingdom and .it works satisfactorily, I · understand.
Clause 9 (2) provides for the keeping of a .

register of all conductors' of vehi cles operating on the roads.

· Section 77 (4) of the Principal Ordi nance makes it an offence for the owner of a hire ·car to use it or pennit it to be used for purposes other than that for which it is registered.

It is sought in this Bill to extend the provision to any per son who drives.

or operates a hire car otherwise than in accordamce with such conditions.
Section 78 of the Principal Ordinance makes it• an offence for any person to drive a hire care without first having obtained a licence to drive a hire car.

V,ery · often people are found driving vehicles other than those for which they have been given a licence to drive .

.
.

Clause II seeks to make it an offence for the owner of a hire car to permit it to be used by any person who is not licensed to drive a hire car, unless such person is specially licensed to drive a hire .car for private use under section 79 of the Principal Ordinance.

-~tion 108 of the Principal Ordinance makes it an offence to take and drive away a motor vehicle without the owner's consent.
• <::;Iause 12 this seeks ~rovision to bicycles and to empower a to extend magistrate to convict of this offence on a charge of larceny of a bicycle.

The intention of this Bill is to bring the Principal Ordinance up to date.

This is the first step which has been taken by Government to implement the Motion which was passed in this Council quite recently in· the hope of preventing the large number of accidents, fatal and otherwise, which have been taking place on our roads.
Except for one Clause which I have referred to as contro I do not think it should be re versial- garded as controversial by Members of this Council - I think that hon.

Mem bers should have no objection to the Second Reading of this Bill.

The Attorney-General : second the Motion.


I beg to Mr. Jai Narine Singh: This Bill, apart from being controversial, is one which affects the lives of the community so seriously that I feel we should be given an opportunity to study it properly, and the debate on the Second Reading could take place on another occasion.

Since the publication of this Bill several repre sentations have been made to me and, I believe, to other Members as well.
This Bill is iniquitous and, having regard to the representations that have been made to me, I feel that an opportunity should be given to Members to go into the matter carefully before the debate on the Second Reading of the Bill is taken.

In the circumstances, I beg to move the ad journment of the discussion on this Bill, if the hon.

Minister agrees.

I am sure he is not anxious to proceed with the Bill today.
Mr, Speaker : I understand that you are moving that the debate on the Second Reading of the Bill be postponed.

Mr. Jai Narine Singh : Yes, Sir.

Question put, and agreed to.

Second R eading of the B~ deferred.

MOTOR V EHICLES INSURANCE (THm.D .

PARTY RISKS) (AMENDMENT) BILI;.

~ .

Ram Karran : I beg to move the deferment of the Second Reading of.

a Bill intituled : .

J • t · · ·- - ~ ~ l t ~ r 121 V ekicles an.d 8TH jANUARY, 1959.
Traffic-Bill 122 "An Ordinance to amend the Motor Vehi cles Insurance ('Ibird Party Risks) Ordinance".

This Bill hinges on the Bill that has just been deferred.

Question put, and agreed to.

Second Reading of the Bill deferred.

ADJOURNMENT The Attorney-General : I beg to move that Council do adjourn to a date to be fixed.

Question put, and agreed to.

Mr. Ram Karran: Sir, I thought that the hon.


Member on the other side would have indicated when he would be willing to discuss the Second Reading of the Bill.

Mr. Speaker : This Council stands ad journed to a date to be fixed.

Council adjourned accordingly at 4.25 p.m. ~ ~ • 1 I • t ~