HONG KONG LEGISLATIVE COUNCIL.
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Mr. Lo's case, expressed succinctly in his own words, is "that the Colony cannot afford to maintain the existing Civil Service" and that it must "cut its coat according to its cloth." The Government would be inclined to concur, if the mover would add the proviso "in present circumstances." One is apt to be misled by metaphors and the Honourable Member seems to contemplate a static Colony, which has reached the end of its growth. It is doubtful if Mr. Lo consciously intends to put forward this view, but the view is implicit in his arguments. With this implication the Government cannot agree.
The Honourable Member takes the figure of the estimated revenue for 1936, namely $26,671,845, which was calculated with the rate of exchange taken at 1s. 8d. to the dollar, which revenue will, if the dollar remains at about 1s. 32d., be increased by a sum estimated at $1,170,000, representing the increased yield of the taxes based on the conventional dollar, and assets without any explanation in support that a revenue of just over $262 millions must be regarded as normal, or, as he says, as representing the cloth according to which the Government must cut its coat. It will be remembered that the revenue in 1931 was $33,146,724, in 1932 $33,549,716, in 1933 $32,099,278 and in 1934 $29,574,286. The final figures for 1935 are not yet to hand. The Government is of opinion that a figure, which, it is hoped, represents the estimated minimum revenue of the Colony at the nadir of a period of depression cannot be taken as the standard for future years.
The Government again is unable to agree that the Colony cannot, at the appropriate time, stand the strain of extra taxation. This Colony is frequently compared with Singapore, although its municipal undertakings are under the direct control of the Colonial Government. Honourable Members will remember that the assessed tax in Singapore is 22+2 per cent., a total of 24 per cent., in comparison with the 17 per cent. in force in this Colony, and in Singapore there is no free water allowance. The Government cannot agree that a Colony, such as Hong Kong, in which there is little direct taxation, where there is no Income Tax, where the duty on whisky and gin is one-sixth of the duty in the United Kingdom, and the duty on cigarettes proportionately even less, "is already taxed to capacity, if not beyond.
it."
The Honourable Member has devoted a considerable part of his speech to an attempt to prove that because 60 per cent. of the Colony's revenue is spent on what he calls "salaries" leaving only $9,500,000, I quote his words, "to cover the whole cost of Civil Administration including social services and the thousand and one items of essential public expenditure" therefore the existing Civil Service is too costly for the Colony to bear. Now I venture to assert that there is a fundamental fallacy in the Honourable Member's dramatic contrast of $14,000,000 spent on salaries and nine and a half million dollars on the whole of the civil administration including social services. No such contrast in fact exists. The Honourable Member seems to
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