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budget by means of a very moderate increase in taxation was likely to constitute more effective action against inflationary tendencies than the procedure of meeting expenditure from Loan funds, even when the Loan was raised locally. He made the point that by meeting capital expenditure from current income we were really investing our surplus balances in capital assets, and that the works provided for in the current estimates did not constitute an integrated programme of the kind normally met from Leen fuids. He agreed that a number of rehabilitation items were provided for, which would have been charged to Loan funds had sufficient halances been available, and that if there was any question of financing some really big scheme such as a water conservation project it was fairly clear that this could not be done from current income. He undertook on behalf of Government that the question of the financing of future capital expenditure would be taken up with you, and that the views expressed by unofficial members would be brought to your notice.
43.
In the subsequent debate on the motion for the approval of the report of the Select Committee, Mr. Landale announced that, as it might result in delay in the execution of the Public Works' programme, he had decided not to move the amendment which he had originally proposed, but he expressed the hope that the questi on of increasing the Colony's borrowing powers would be energetically pursued and that your consent would be readily obtained.
it
44.
In order to complete the works, on which a start has been made under the present year's programme, will be necessary to provide a sum of at least $14,000,000 for Public Works Extraordinary in the 1950-51 estimates, and practically the whole of this can be classed as rehabilitation expenditure, as it is in respect of buildings and essential services which it has been necessary to replace as a result of the Japanese occupation. In addition to this several Government schools destroyed during the war have not yet been replaced, and it will be necessary to put this work in hand as soon as new sites are definitely decided upon. A number of the less important streets, which are in a deplorable condition as a result of lack of maintenance over a period of years, have still to be resurfaced, and the rehabilitation of the water supply is by no means complete.
45.
It is probable too that a decision will soon be reached in regard to the Tai Lam Chung water conservation scheme, and this will involve expenditure of at least $64,000,000 spread over a period of seven to twelve years. The existing ferry service no longer meets the requirements of the greatly increased population, and a scheme for its improvement is under consideration. New piers will be constructed by the Ferry Company, but in order to provide for the present volume of vehicular traffic it will be necessary to set them well back from the present roadway, and this will involve a moderate amount of reclamation. Other major reclamation schemes involving an expenditure of over $30,000,000 must soon be undertaken in order to provide more building sites, but these schemes will in the long run prove very profitable.
46.
It is therefore abundantly clear that, if the Colony is to continue to progress, this Government will within the next few years be required to embark on capital