26
a
should be increased rather than the reserves raided.
Taxation in Hong Kong is not high and the Committee
is at present considering how the basis of taxation
might be broadened.
For these reasons the Governor now submits
a list of special works to be added to the 1939
provision, at a total additional cost of $799,375.
These would presumably be the continuation or
extension of the five years' programme (see 1 on
53941/38). All of these works are stated to be
urgent.
Apart from the present proposals
expenditure for 1939 is not expected to exceed the
Counting in these proposals,
approved provision.
surpluses at the end of 1939 will on the present
calculation amount to $12,100,000; and the
Governor hopes to balance the 1940 Budget without
touching the reserves if necessary by extra
taxation.
The Governor recently submitted a
proposal involving expenditure on the part of the
Hong Kong Government to the extent of $5,000,000,
for buying out the military from their present site
at Victoria. I am not sure how the present
proposals would be affected by this deal if and
when it is approved; but it seems to me that the
present proposals depend entirely upon expectations
of revenue during the current year, which on the
present showing certainly seem good. The Governor has assured us (paragraph 5 of 4) that if at any
time it were considered necessary to curtail
expenditure