3
Mr Emanuel
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$50
Mr. Mayle.
Telegram at No.7. This is not only a question of the estimates but it also raises certain other important points of principle which will have to be considered separately. The telegram may be summarised as follows:
It is not stated whether the period covered is for a complete 12 months but I think we can assume that this is so. The revenue is estimated to amount to $41 millions and war tax to $15 millions making a total of $56 millions. The total expenditure is estimated at $104 millions but of that amount it is estimated that $19 millions have normally to be met by raising a loan, and $5 millions can be cut by pruning, leaving a net amount of $80 millions. deficit is thus $23 millions or approximately
1 million as against the provision in Colonial Middle Eastern Service estimate for grant-in-aid
£900,000.
No
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No provision has been made for the trading activities of the Supplies Dept, presumably because this Dept. will be ultimately.
ser provision is made for food subsidies and it would appear from paragraph 4 of the telegram that no such provision is estimated to be required.
food
No provision is included in respect of war damage compensation but this is a matter which must be dealt with as an entirely separate issue to be financed separately, either by special levies on property or by other special means of financing. Also, no provision has been made for any contribution towards the cost of the Military Administration. This is a matter on which a decision can very well be postponed for the time being until it is raised by the Treasury. We are pressing the War Office to bear the cost of the Military Administration from 1st April until the date of hand-over to the Civil Administration so no provision need be made on this account.
The scope for reduction in expenditure is comparatively small especially in view of the need for the rehabilitation of the Colony at the earliest possible date. It is desirable that the Colony should cease to rely on assistance from H.M.G. as early as possible. It will, therefore, be necessary to consider in what way the revenue can be increased and also, to what extent expenditure can be justifiably financed from loan funds.
As regards increase in revenue, the llong Kong Government should be urged to consider increasing duties on liquor and on tobacco, both of which provide a considerable portion of the revenue in the U.K. The question of re-introduction of income tax and, if necessary, increasing the pre-war rates will also have to be considered. Additional duties on luxury goods and other sources of increased revenue should be explored.
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