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Government offers them auditional facilities. As to the need for revenue, it is true that there are plenty of useful projects on which Hong Kong could spend money, but I feel very doubtful whether the
whedents actual budgetary position justifies adspice of an exceptional or dubious character. The last financi year closed with a quite handsome surplus and the Estimates for the current year seem to me to suffer to an exceptional degree from that besetting sin of Colonial Treasurers, the under-estimation of revenue. I have gone through the revenue estimates and the comments on them in some detail and it is remarkable with what monotonous regularity the comments explained that revenue for 1948-49 has been put at a lower figure than for 1947-48 for no other reason than that there could conceivably be a trade depression during 1948. There is, in fact, no sign of any such depression and there could equally be a further increase in trade. I suspect, therefore, that it will be found that the Estimates will, in practice, have been put considerably too low, and that the current year will show a further handsome surplus.
Nor is it clear that there has been any thorough examination of other possible sources of revenue if additional revenue is immediately required. I should not disagree that it would be difficult immediately to increase the rates of income tax, but that is not suggested as a permanent objection so that it is not a good reason for establishing as a matter of permanence an alternative source of revenue in the shape of lotteries. I cannot trace that the alternatives of further increases in the taxes on liquor and tobacco have been fully examined. Looking to the social effects of taxation, and accepting that on balance both drinking and gambling are activities which ought to be discouraged rather than promoted, it is an important difference that a tax on liquor to some extent acts as a deterrent, whereas the organisation of a State lottery can only act as an incentive.
Finally, if there really is more money to
be got from the gambling field, I am still not convinced that it could not be done by encouraging the Jockey Club, or possibly other local organisations, to organise more or bigger sweepstakes.
If you agree that we should try if possible to avoid the extension of this expedient in Hong Kong, I should propose to discuss further with Mr. Follows on the above lines.
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