3
See 53687/37.
See (5) on the above file.
There would, I think, be no occasion for
pressing for further curtailment of services,
and if objection is taken to the proposals, it
seems probable that taxation would have to be
raised. It may be noted that the 0.A.G.
considers that taxation in the Colony is still
low. The Hong Kong Estimates of Revenue are
generally conservative and normally there werk.
be no objection to keeping taxation at its
present level, I think.
Two factors affect the present
position adversely however.
(1) Owing to the shortage of water
would l
supplies, the Colony has recently had to under-
take a programme of expansion involving a
This expendi-
total expenditure of $3,185,000.
ture will be spread over two or three years,
and in the original proposal for this under-
taking the 0.A.G. anticipated that the whole
scheme could be financed from revenue. It is
now proposed that this expenditure shall be met
from loan funds and it is hoped to revise the
whole system of water charges so that the full
cost of the water, including all new capital
expenditure, shall be met by these charges.
There are no loan funds at present available and a sum of $11,000,000 has already been
advanced from surplus balances against the 1934
loan. It is proposed that this precedent should
be followed and that no further part of the 1934 loan should be raised at present as there is
still sufficient cash in hand. I see no
objection