OUTWARD TELEGRAM
21-7
53652/48
Code
(9) (13)
for/
(9)
NO. 751
TO HONG KONG (Sir A. Grantham
FROM S, OF S., COLONIES.
Sent 7th July, 1948. 12.30 hrs,
Your despatch No. 100 of the 7th May and your savingram No. 412.
1948-1949 Estimates have been discussed with Follows and I now approve generally. I have, however, following commente in anticipation of fuller discussion in despatch which will follow.
Revenue has been estimated on conservative basis and allows for recession of trade as compared with 1947-48. I appreciate, therefore, that if levels of trade and general prosperity are maintained, estimates of revenue should be exceeded and a further revenue surplus earned. I should be glad to know whether it is yet possible to judge from revenue receipts in the first quarter how far revenue is actually being maintained as compared with last year,
Even
Estimates as presented, however, provide for no significant addition to the Colony's surplus funds. allowing for some recession of trade, I should have hoped that it would have been possible to make some such addition as provision against heavy demands which the Colony will undoubtedly have to meet re capital and rehabilitation expenditure in the next few years, to say nothing of need for developing additional social and other services in the near future. I feel, therefore, that it is still necessary to give permanent strengthening to the revenue structure and should be glad if you would consider further as early as possible what measures can be taken to that end, Although I appreciate that at this early date after its introduction increase in effective rates of Earnings and Profits Tax would not be feasible, I should not have thought it impossible to make further increases in taxes on liquor and tobacco, and no doubt more extended purchase tax and other possibilities will be closely examined.
I trust that possibility envisaged in paragraph 32 of your despatch of effecting some reduction of estimated expenditure, and in particular immediate staff reductions following on preliminary investigation referred to in paragraph 13 of your despatch, will be pursued energetically.
Copies sent to:~
Treasury
##
FOR
Mr. Pitblado.
Mr. H. R. Apperley.