78
?
(1).
-10-
approved subvention by the issue of rations, which were provided from the Relief of Destitutes' vote. The value of these additional rations has now been included in the subventions and free issues by the Social Welfare Department have been discontinued. All subventions to local institutions have been carefully reviewed by the Social Welfare Advisory Committee, and the new rates provided for in the estimates represent their recommendations.
39.
Many of the subventions are paid to institutions which are carrying out educational and medical work which otherwise Government would have to provide from its own resources. It is normally cheaper for Government to subsidise in such cases rather than carry out the work itself. Nevertheless the total of $13,250,000 paid out in subventions is an extremely high figure. Of this, $7,917,000 is paid in grants to Grant-aided and Vernacular schools, while $1,500,000 goes to the University, $2,625,000 represents the subsidy to the Tung Wah group of hospitals, and to the Alice Memorial Hospital, while $150,000 goes to the Anti-Tuberculosis Association
40.
In addition to the expenditure provided for in the Appropriation Ordinance, expenditure from Loan funds is being continued. Up to the 31st March, 1948, expenditure from this source amounted to $57,269,913, and it is estimated that by the 31st March, 1949 this figure may have been increased to $98,467,615. Of the balance which still remains available, over $12,000,000 is earmarked for new rolling stock for the Kowloon-Canton Railway, which is coming forward very slowly, and a further $8,000,000 is earmarked to enable work to be started on the new airport as soon as a final decision is reached on the question of site. Some $6,500,000 is being provided for the completion of a number of Police stations, and a further $6,000,000 will be expended on new schools and on the completion of the permanent Government quarters now under construction.
41.
As I forecast in paragraph 7 of my telegram No. 173 of the 22nd February, 1949, Mr. D. F. Landale, in the course of the debate on the second reading of the Appropriation Bill, strongly criticised the practice of financing capital expenditure from current revenue, which this year had led to an increase in taxation. He pointed out that the public debt of the Colony was of very modest dimensions, and that if we had any faith in ourselves we could, without over-borrowing, carry a public debt of two or three times the present figure, and thus relieve the budget of all the construction work now provided for under Public Works Extraordinary. The senior unofficial member declared that he proposed in due course to move an amendment to the motion for the acceptance of the Select Committee's report to the effect that the whole of the provision under the Head Public Works Extraordinary should be deleted from the Schedule to the Appropriation Bill. Several of his colleagues supported him in their speeches but Sir Man-kam Lo was rather more guarded and, while he agreed that Mr. Landale's proposals were in accordance with sound economic theory, he had some sympathy with the existing practice, as he felt that in any case the burden on posterity would be much heavier than that which the present generation had to bear.
42.
In his reply, the Financial Secretary expressed the view that in times of commercial prosperity it was prudent to meet from revenue as much of the current expenditure, whether capital or recurrent, as was reasonably possible. He agreed that the existing public debt did not constitute a heavy burden, but considered that in less prosperous times the community might be glad that we had not a dded to the burden of Loan charges. He pointed out that the balancing of the