INWARD TELEGRAM
TO THE SECRETARY OF STATE FOR THE COLONIES
2
APR
I
Cods
FROM HONG KONG (Sir A, Grantham)
D. 30th March, 1948, R. 30th
COFIVED
14.40 hrs,
NO. 350
1943
I
AC
7
258
Your telegram No. 157. (5)
Estimates.
This telegram wee only received just before first reading of Appropriation Bill was due to be taken. It was of coures realleed that it would have been greatly preferable for sxpenditure to have been covared by normal je vonue and for arrears of terning and profița tax to have been utilised to build up 7038:289. This was not, unfortunately, possible on the present cecasion, but it must be borne in mind that expenditure for the Goming year 18 swollen abnormally by certain non- zecurrent items such as 85.000,000 in respect of Kai-Tak (Hong Kong) compensation.
(1) a 54281/98
(I am)
2.
I em much concerned by the scale of sapenditure generally and it is my intention to review all departmental expenditure very carefully when Efficimsy Expert (see my telegram No. 230) arrives. Over 60% of our personal emoluments bill is in respect of menial staff and it seems, however, that this is a relia of the days when human labour in the East was Shoup and there is no particular incentive to economise in staff. Now that salary scales for the public service have been improVAC I propose in conjunction with the Efficiency Expert to sxamins establishment carefully with a view co outting out all. staff which is not strictly necessary. This was particularly stressed by the Financial Secretary in his Budget speech.
30
As regards the desirability of increasing the standard rate of cawangs and profits tax. I have already in paragraph 3 (7) · of my confidential asspatch No. 57 of 18th March explained that 54307/48 I should be reluctant to take each a step at the present juncture )
So faz svpotone appear to have been on a smaller scale than was expected. but if the rate la increased there is little doubt that evasions will become widespread. The greatest difficulty is being experimced in chooking assessments, even under present conditions, and owing to lack of progress in the recruitment of kas08a0ca a little less than half the estimated tax to be assessed for the year has so far been collected, large taxpayers.
1
cetly from
Even to collecb thie amount it has been necessary to resort to provisional sacossment in many 08608.
In additior to efforts being made to being assesments up to date, present very inadequate slet? hey: to combat largo acple evasion, poaltion will become hopeless, and I would strongly recommend that nothing in. Shu dature of thepdase in rata should be attempted ENT entablashwant of Aneessore is brought up to strengta. As I explained in Rest pudegraph in my despatch No. possibility of providing an ordenens for taxe ion of iveoms such as perittances to par ugeco peorized· La Coluny has/bean overlasked out Buch a stop is imposninle while Department 19 28 seriously nder plan* ca 18 the 368s at pregenbo
57,
(7) on 54307/8 noth