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The satisfactory trading figures for the past year are
When the also reflected in the Government's revenue returns. Estimates for 1948/49 were presented to this Council last March, The a surplus of $1,123,845 on the year's working was forecast. figure revised to date is $24,000,000, an increase of over $224 millions.
It
They
So far so good. Since the reoccupation every year has That been better than the preceding one, but what of the future? indeed is uncertain. We can hope for continued trade and propper- ity but we must not be surprised if that does not come about. is not as if trading conditions were made by us in Hong Kong. depend on innumerable factors in other coutrries, and especially in China. At this juncture, he would be a rash man who would Our predict what the state of China will be a year from now. motto must therefore be "Hope for the best but prepare for the worst", and this is the basis on which our Estimates of Revenue
The Estimates of and Expenditure for 1949/50 have been drawn up.
Our expenditure has Revenue are conservative but not pessimistic. been pruned drastically, as will be realised when I state that the draft Estimates (excluding Public Works Extraordinary) when originally sent in by departments totalled $15 millions more than
And these original as they are now presented to this Council. Estimates contained few items that could be called unnecessary and none that could be called undesirable.
whilst such
Where there
which means
The pruning that has taken place has eliminated many projects that should be carried out, such as more schools and there are only 3 teachers, more roads, more dental surgeons Government dental surgeons for the whole Colony, things as a civic centre cannot even be considered. has been no cutting down but a substantial increase that there is less for other things is in security measures,
Whilst we believe notably the Police and the Defence Force, in and want peace, we would be foolish if we did not take measures
It is a form of insurance. As I to ensure law and order. stated at the Hong Kong Volunteer Defence Corps farewell dinner
re required primarily on 9th February last, our security forces A for internal security. It would be a fair question to ask, "If there are so many necessary things to be done which you have cut out of the draft Estimates, why not increase t axation substantially,
The so that you would get enough money to enable you to do them" answer to this is Hong Kong's peculiar position as an entrepot and not, in the main, as a producer, Although we offer better facili- ties, and greater security than most of our competitors in this
We don't want part of the world, they are relatively expensive.
K
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to kill the goose that lays the golden eggs by increasing taxation, and so the costs of trading in and through Hong Kong,
If we do that the to the extent that trade will be driven away. net result would be that we should actually collect no more revenue, and possibly even less, than if we had not increased the taxes, whilst at the same time we might do permanent injury to
solely We should increase taxation Hong Kong as an entrepot. for the purpose of carrying out desirable developments of economic and social services to the limit that we can without doing injury to our economy. Opinions will naturally differ as to what that limit should be. Certain increases in taxation will
I shall leave be made effective in the ensuing financial year. it to the Financial Secretary to deal with these.
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There is another difficulty affecting Government financing to which I would refer, and that is that much of our capital expenditure has to be met from current revenue. difficulty is made e ven more acute by the fact that the Rehabili- tation Loan of $150 millions is inadequate for the amount of rehabilitation that is required of Government buildings. throws an added burden on to current revenue.
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