180
are slightly higher than those recommended by Hong Kong Commission I consider it would be reasonable that temporary flat rate allowance of dollars 425 per mensem ((sterling) 318. 15shillings) should be granted on basic point over £(sterling) 750 per annum. This would give roughly the same total emolument as those recommended by the Commission, I am satiefied that this would be fully justified in respect of period from 1st January, 1947, until date for review, in view of evidence of actual living costs of officers concerned received by Commission. I agree, however, that if this temporary rate is accepted for period up to 30th June announcement should include a clear warning that rate will be reviewed by 1st July, 1948, and that no (repeat no) guarantee can be given that Board of Review will not (repcat will not) recommend introduction, of a tapering scale of allowances on salaries above a certain point or that any allowance at all will be payable after 30th June, 1948, on higher salary ranges. I do not consider that there would be any serious difficulty if such a warning were given in introducing an entirely different basis after 1st July if Board of Review after consultation with Malayan Committee thought a different basis was justified. Hong Kong report stressed fact that rates proposed were temporary until problem could be tackled in more scientific manner.
4.
I am strongly opposed, pending findings of Board cf Review, to introduction of different rates of allowance payable to accommodated and unaccommodated officers. Possibly unlike Malaya, vast majority of Government staff in Hong Kong find their own accommodation. Apart from institutional quarters, which are occupied both by local and overseas staff, Government only provide accommodation for overseas officers, and different rates for accommodated: and unaccommodated officers drawing over £(sterling)1,125 could only be introduced if systems of differentiation were introduced throughout the Service. All officers occupying Government quarters are being charged rent depending on grade of quarters occupied but subject to maximum charge of one seventh of salary. Government Teased hotel and hostel accommodation is being similarly graded and appropriate charges made. Different rating upon unaccommodated officers would be tantamount to reinstituting rent allowance for former class and if introduced throughout the Service system would prove extremely costly.
5.
I see no alternative to recommendation in paragraph 3 above, which is solution suggested in paragraph 2 of your telegram under reference. Grateful for very early reply in. order that adjustments may be made Before end of financial year.
Delay has already led to application to retire from additional three senior officers who can be ill spared and expect serious discomfort leading to further resignations if Salaries Commission recommendations regarding cost of living allowance are not approved in the immediate future. Ends.