HONG KONG LEGISLATIVE COUNCIL.
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in view of the approaching end of the financial year, it was inadvisable to defer presentation until the estimates could be recast in print so as to conform with those later proposals. The only possible course, therefore, was to lay the estimates as printed before the Council, to state when doing SO that they would undergo a considerable metamorphosis and lastly in Select Committee to recast them in their new form, or rather forms, for there will be two budgets for the duration of the war where one used to grow in peace time.
I am very sorry for any confusion that this way of handling the subject may have caused but in the circumstances I fear that that was inevitable. But so far as the ordinary estimates of expenditure are concerned the changes to be made are of a "paper" rather than a practical nature: it is the defence budget where most of the innovations come.
We propose, as Your Excellency has said, to have two budgets; the ordinary one which will strongly resemble the budgets of previous years, and a defence budget which will be quite new and I hope a feature of only a year or two.
After that general explanation I have to ask honourable members to turn their attention back to the original estimates of expenditure for 1940/41 which have been in their hands for 10 days. As a memorandum explaining the principal matters of novelty contained in them was circulated at the same time I do not propose to deal with those estimates at any great length. I fear that the innovation, for which I was responsible, of permitting the Press to see the printed estimates with the Council's Order of Business has led some of the papers to misinterpret them and the statement of Government's full proposals may be disappointing to those who read some of the more sensational deductions published yesterday afternoon. The Press have also given due prominence to one fact shown by the print, that is that we already have the forty million budget which I spoke of as a possibility of the more distant future twelve months ago. Expenditure and, fortunately, revenue as well have continued to increase automatically with the increase of population. On a peace basis an approximate balance was expected but the war is likely to increase expenditure in many directions without correspondingly increasing revenue from existing sources.
The estimates as printed contain no innovations in revenue apart from the re-arrangement of the heads in more convenient form. As to expenditure the procedure of examination by a select committee of this Council which will be followed this year as before will afford full opportunity for honourable members to make any comments which they desire and elucidate any obscurities in the details. Those details were mainly settled before the outbreak of war, but no necessity is seen at present to alter them at all considerably. In preparing the final draft, a number of items of new expenditure which it had originally been desired to include were deleted in order to avoid
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