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23. Total receipts from rent of Government Property, etc., (Head 7) are estimated at $1,635,050, i.e., $6,150 less than the approved estimate of 1937. Normal increases in most items are offset by a drop of $50,000 in permits for encroachment, etc., on Lands not Leased.
24. Miscellaneous Receipts (Head 9), estimated at $592,000, are $488,500 below the approved estimate for 1937. This is accounted for by the special item of $500,000 from Trade Loun Account. Receipts from Royalties payable by the omnibus, tramway and ferry companies are expected to show increases as traffic has increased with improved trade conditions.
25. Receipts from Land Sales (Head 10) are estimated at the same figure as the revised estimate for 1937, $355,000, being $149,000 above the approved estimate for the current year. It is anticipated that the improvement already shown this year will be maintained in 1938.
Expenditure.
25. Expenditure for 1938 is estimated as follows:-
Ordinary Expenditure
Extraordinary Expenditure
(ie., Public Works Extraordinary).
$32,090,702 1,277,850
$33,368,552
For purposes of conversion the dollar has been taken at 1s. 3d, for the purpose of payment of sterling salaries and 1s. 23d. for other sterling payments. After deducting the total estimated revenue of $30,254,920 a deficit of $3,113,632 is shown.
27. On this basis, the position at the end of 1938 is estimated to be as follows:-
Excess of Assets over Liabilities at 1.1.37
Revised estimate of Revenue, 1937
$12,917,132
31,240,000
$44,157,132
Revised estimate of Expenditure, 1937
32,102,000
Estimated excess at 31.12.37
$12,055,132
Estimated Revenue, 1988
30,254,920
$42,310,052 33,368,502
Certain special items of revenue already mentioned have helped to balance the accounts in 1937 but cannot be counted upon in 1938. As to expenditure, while actual large commitments for new works are few, there are many smaller works in hand and others which are urgently required. Here, as in a great deal of mainten- ance work, it is a matter of catching up with expenditure necessarily deferred in recent years.
The improved revenue of 1937 entails also extra payments, to be made in 1938, for military contribution. In these circumstances it is felt that it is legitimate again to envisage the possibility of the surplus falling below the $10,000,000 level. The alternative would appear to be additional taxation.
Loan Works.
This
29. The 34% Dollar Bonds of a nominal value of $14,000,000 issued in 1934 at 99% produced $13,860,000. At the end of 1936 $23,066,269 had been spent, of which $9,206,269 had been met by advances from surplus funds. method of financing has been continued. By 30th June, 1937, a further $759,608 had been advanced, making $9,965,877 in all. The revised estimated total expenditure at 31st December, 1937, is $24,184,414, of which $10,324,414 have been advanced from surplus funds. A detailed account of the expenditure is given in Appendix VI (b) of the Estimates.
30. The estimated total expenditure on the Shing Mun Gorge Dam has been increased to $8,800,000 less $200,000 anticipated receipts from sales of plant. It will in consequence be necessary to re-allocate the Loan Funds, and in particular to reduce the allocation to the Central Market. As to the provision of funds to complete the Market see paragraph 32.
31. As mentioned in paragraph 14, it had been proposed to charge under Head 6 Airport (C) Wireless Telegraphy Station (Appendix VI (6)), the cost of a building to be erected for the purpose of Wireless services at an estimated cost of $55,000. As, however, it has now been decided to use that building, now in the course of erection, for broadcasting purposes and as further expenditure of approximately the same amount is required for other wireless installations for the Airport it has been thought better to charge the cost of the building (now put at $50,000) to Public Works Extraordinary, for which a vote will be taken in 1937, and to charge the cost of the new installation, which will be ordered for delivery in 1938, to the loan funds so made available.
32. It is anticipated that the whole of the 1934 loan will have been spent by the end of 1938. It is, however, intended to submit proposals for the charging to loan account of certain expenditure on new water works which have become It is intended to meet this necessary, amounting to approximately $3,185,000. expenditure by advances from surplus balances so long as that continues to be possible. It is expected that about $170,000 will be spent in 1937 and $1,730,000 in 1938.
It is also proposed to charge to the suggested new loan a balance of $211,000 for the Central Market for which funds are not now available from the 1934 Loun. The raising of a further part of the 1934 loan to repay some of the existing advances will require consideration in 1938.
Estimated Expenditure, 1938
Anticipated Excess of Assets over Liabilities at
31.12.38
$ 8,041,500
28. It has hitherto been the object to maintain the surplus at not less than $10,000,000; the anticipated surplus at 31st December, 1938, is $1,058,500 below that. When the 1937 Estimates were prepared it was contemplated that a deficiency below the $10,000,000 level of nearly twice that amount might have to be faced at the end of this year; but fortunately those expectations have not been fulfilled. On the other hand, the preparation of the 1938 Budget has not been easy. General conditions improved during the first half of the year anil promised further improvement, but the outbreak of hostilities in China has rendered calculation difficult and there can be no assurance of secure prosperity next year.
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