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revenue from Tobacco Duties was seriously over-estimated, though I have for some years past, both in Malaya and in Hong Kong, found this source of revenue a steadily improving one. No doubt some of the falling off is due to increased manufacture in the Colony, resulting in the importation of a larger amount of non- manufactured tobacco, with a lower rate of duty, and a less amount of manufactured tobacco. The suggestion of the Senior Unofficial Member that, as drinks and smokes are perhaps the last things. which people ordinarily forego, (as they are), we might obtain larger consumption and more revenue by reducing the duties on liquor and tobacco, strikes me as somewhat of a "non sequitur." The point, however, might be further considered.
My Honourable friend the Colonial Secretary has dealt with the question of Opium. No doubt some of the falling off in revenue both from import duties and opium is due to smuggling, and I trust that the provision of additional Revenue Officers for the New Territories will result in some improvement, though I doubt whether it will be very large. I would only add that the problem which at one time loomed rather large, namely, what we should have to do to replace the revenue from opium if the policy of entire abolition were adopted, seems likely to solve itself, for the revenue under this head has dropped so much that its entire disappearance will not have a very marked effect.
The estimated revenue for the forthcoming year under Water Supply and Meter Rents shows a considerable increase due, in a large measure, to the adoption of universal meterage. The question of charges for water supply is one which will have to be seriously considered during the next year or two. We have undertaken to make our water supply self-supporting and, as you know, we are spending very large sums on this vital service. My own feeling is that there should be no free allowance and that all water consumed should be paid for, though I would give a minimum allowance to each house at very low rate and charge higher rates on a sliding scale for water consumption in excess of such allowance. I think that such a system is necessary to bring home to consumers the necessity for avoiding waste. I would prefer, however, to make no change until our new water works are further advanced.
In regard to Expenditure, I have tried to keep the personnel down as low as possible having regard to efficiency. We are endeavouring to carry out as far as appears possible the policy of increasing the number of locally recruited officers and reducing the number of those recruited from Europe. It is, however, neither possible nor expedient to proceed too fast with such a policy.
As the Colonial Secretary has dealt comprehensively with the increases in the various departments. I need only make a brief reference to one or two points.
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