In 1904-5 the revenue being within L41 of the amount of the preceding year, while the expenditure was about L26,000 less, a surplus, the first for five years, was recorded for the nominal sum of L13,995. Seeing that loan expenditure had been reduced to less than a quarter of a million, that general retrenchment had been carried out, and that a recovery of trade and industry was not yet clearly apparent, the result must be deemed highly satisfactory; also, the Treasurer refused, after his first year of office, to continue the practice of charging to loan fund the amount spent by the Commonwealth Government on new works and buildings. The amount was not large, but even the L20,000 to L30,000 per annum so expended would, if transferred to loan, have improved the appearance of the State revenue account. In 1904 the obnoxious but necessary Special Retrenchment Act was re-enacted for the nine months of the financial year still remaining, the rate of deduction being diminished by one-half, while provision was made that any surplus revenue for the financial year should be paid to the public servants. The year closed with a surplus of L13,995, which was at once distributed _pro rata_ among the retrenched officers. The continuation of the Act was not popular among public servants, but it was deemed necessary in the interests of the wider community; and, as the net result was that a public officer only lost 7s. 6d. for every L1 deducted from his salary during the two previous years, it can hardly be considered unfair, having regard to the losses sustained by the general public during the same period. Another unpopular measure was the Income Tax Amending Act, which exempted from taxation incomes of L100 and under, but in regard to the larger incomes somewhat increased the taxation then levied. In 1906 a further Income Tax Amending Act was passed, adding to the taxation in some cases, but raising the exemption to L160 and granting an exemption of L120 on incomes between L160 and L200. In 1907 another amendment of the Act increased the exemption to L200 on all incomes, and reduced certain imposts, which had the effect of relinquishing revenue to the extent of L40,000 to L50,000 for the year. But times had then improved, and the Treasurer could afford this grateful relief to the poorer classes of the community.