Sect.File2/2291/490.
No. 57.
GOVERNMENT HOUSE,
HONG KONG
31st March, 1950.
68
14
Enclosure No.2
Sir,
With reference to my telegram No.196 of the
24th February, 1950, I have the honour to transmit, for
Enclosure No.1 your consideration, copies of the estimates of revenue and expenditure for the financial year 1950/51, as approved by Legislative Council. Copies of an explanatory memorandum on the estimates are also enclosed; but since it was written there have been certain modifications in the estimates as a result of discussions in Select Committee. The most important of these modifications were the provision of an additional sum of $1,395,318 in respect of Kai Tak compensation owing to the impossibility of completing payments before the 31st March on the scale originally contemplated and the inclusion of a sum of $221,000 in respect of a building grant for a school to be built in Kowloon by the Chinese Methodist Church. In addition a sum of $400,000 was included under Public Works Non-recurrent for the regrading of Queen's Road Central, but this was offset by a corresponding reduction in the provision under Public Works Recurrent for the maintenance of roads and bridges. The amendments made in the final proof of the Enclosure No. estimates are set out in detail in the enclosed copies of
the Select Committee's report.
Sapy to Lay (13 on 53689/50)
2.
Before commenting in detail on the estimates for 1950/51, it will, I think, be desirable to give a brief outline of the financial position on the 31st March, 1950. The revised estimate of revenue for 1949/50 was $248,523,927 and of expenditure $190,550,253, after making provision for a supplementary payment of $5,000,000 to the 3 Rehabili- tation Loan Sinking Fund. This revised estimate of revenue finally turned out to be too low for, as a result of heavy payments of duty and of comparatively large sums paid by the Military authorities at the end of the financial year, local revenue collections up to the 31st March, exclusive of any revenue received by the Crown Agents since December, totalled no less than $258,354,953. Assuming that the final revenue figure will be a little over $260,000,000 the approved estimate for 1949/50 will be exceeded by nearly $80 million.
When the estimates for 1949/50 were prepared, the political horizon was dark and it seemed that trade with China might practically come to a standstill. Fortunately, however, trade, far from falling off, reached another record figure. It was also in better balance. Even where China was concerned, trade showed an upward movement, but this was of course largely due to the closure of Shanghai and the consequent diversion of cargoes here.
3.
4.
All the main revenue heads exceeded the estimates with the exception of Earnings and Profits Tax. This short fall was due to the removal of certain records by the Police in connection with an enquiry and the arrears will be collected during the current year. The main source of the
large....
THE RIGHT HONOURABLE
JAMES GRIFFITHS, M.P.
#1950
RY