Special expenditure includes considerable gums which would normally be charged to loan expenditure, such as seven and half million under Public Works Extraordinary for reconstruction of Government property and large sums for re-equipment of Medical and Educational Departments. It is proposed to extract such items on the assumption that loan will be floated in London in the not too distant future. This will probably reduce expenditure, exclusive of loan expenditure, to some 85,000,000 and pruning of departmental figures may reduce it to say 80,000,000, No military contribution has
been included.
3.
Estimated expenditure for (?1941/2) was 60,642,715 plus 2,418,978 provided by Supplementary Votes and 8,170,475 authorised by Special Warrants in anticipation of Supplementary Votes. Total 71,232,168. Figures in preceding paragraph therefore not excessive, taking into consideration rise in costs, complete lack of maintenance by Japanese and necessity of meeting five years annual drawings on loan.
4. Figures in previous paragraph do not take into account on either side trading activities of Supply Department nor has any allowance been made for food subsidies, At present prices, just possible to put Siam rice on the market at controlled price without actual subsidy and it will not be possible to obtain supplies from other sources. At present, subsidy on flour, with which rice ration is supplemented, costing 300,000 a month but it is proposed to cut out this expenditure by immediate slight increases in price.
5. The financial position is thus far from satisfactory. Although it is hoped that there will be some fall in the cost of living with resultant reaction in cost of rehabilitation allowance, this will be more than offset by the necessity for some increase in salary for permanent employees,
In many cases it must be admitted that present salaries are inadequate and it is becoming increasingly difficult to resist pressure for some increase. Salaries Commission inevitable on restoration of Civil Government and it seems probable that Personal Emoluments figure of some 24,000,000 must be faced in the future if present establishment retained. Our general policy must therefore be to employ less Europeans and more Chinese in technical posts.
16.
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155