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HONGKONG LEGISLATIVE COUNCIL
and other assets which are not immediate- ly realizable, and cannot therefore be re- garded as liquid assets available to meet a deficit on the Budget. In preparing the budget for 1927 the Government has therefore been faced with three possible courses,
1. To restrict expenditure within the
estimated revenue.
1.
To increase the revenue so as to meet the estimated expenditure, 3. To resort to borrowing, and it is with these three possibilities before us that the budget now laid before you has been framed. When the details of the Budget have been examined I hope that Honourable Members will agree that it has been framed in what I would term a spirit of sober optimism. We are justified in being optimistic, but, as Sir R. E. Stubbs pointed out last year, time will be required to re-establish our posi- tion and with China distracted by civil war' and internal commotion trade will still be difficult even after the special hardships recently imposed upon this Colony have been removed,
As set out in the printed Estimates now before you we have estimated our revenue for 1927 at $20,407,397 which, though it is less by $960,346 than the original estimate for the current year,
is $920,740 more than the revenue we now expect to realize. These estimates include certain comparatively small additions to our sources of revenue which, in present cir cumstances the Government feels justified in tapping. These are first, an increase in water charges estimated to bring in about $100,000. It is proposed as from 1st January next to increase the charge for water supplied to shipping by water boats from 50 cents to $1.00 per 1,000 gallons, and for wharf and building supplies from 75 cents to $1.00 per 1,000 gallons.
The Colony has recently expended very large sums in increasing and improving the water supply, and it is felt that these increased charges are fully justified. The rates for water for shipping at present charged in Hong Kong are far below those in force in most of the other Far Eastern Ports. The Shing Mun Valley supply is beyond reproach both in quantity and in quality and the charge will be only $1.00 per 1,000 gallons as against $2.00 and Rs. 5/- per 1,000 gallons in Singapore and Colombo respectively.
Secondly, in connection with representa- tions which have been made by the local Medical Profession it has been decided to increase the rates charged in Government Hospitals to 1st and 2nd Class Patients to cover to
extent the cost of Medical Treatment. An increase in revenue of $38,000 is anticipated from this change.
some
Before passing on to the details of the Estimates of Expenditure I would invite the attention of the Council to the altered form of the estimates. The various Heads of Expenditure are divided into numbered sub-heads, of which the total cost of the Personal Emoluments of any particular Head forms the first. The Sub-Head Personal Emoluments is fol- lowed by the sub-heads under Other Charges and Special Expenditure, after which the total expenditure for the Head is shown. The details of the sub-head Personal Emoluments are printed as a kind of appendix to each main Head and the numbers in each class or grade are shown in parallel columns for 1926 and 1927 for convenience of comparison. It is hoped that Honourable Members and Heads of Departments will find the new form more convenient in use.
The exchange rate of the dollar has been aken at 2s. Od. instead of 2s. 2d. the rate adopted in the 1926 Estimates with a resulting increase in the dollar equivalent of all sterling expenditure.
The total estimated expenditure as you will see from page 12 of the printed Estimates is $22,194,702 and from this is excluded all expenditure on the Shing Mun Valley Water Scheme a matter to which I will refer later. The Estimate shows a reduction of $1,595.913 on the original and of $2,663,084 on the revised estimate of expenditure for the current year and will leave us with a deficit of $1,787,305. To meet this I shall at a later period in to-day's proceedings lay before you certain proposals estimated to pro- duce an additional revenue of $600,000.
The balance the Government proposes to meet by charging the whole of the Shing Mun Valley Scheme to a loan to be raised at an appropriate time and meanwhile to finance the Scheme by bor- rowing. The amount which will have been expended on the Scheme up to the end of 1926 is estimated at $2,050,000 a further sum of $800,000 is required in
HONGKONG LEGISLATIVE COUNCIL
1927 and about $505,000 in 1928. This will complete the first portion of the Scheme and place the water supply of Kowloon and for shipping beyond any probability of shortage for an indefinite period. It does not provide for bringing the water across the Harbour to Hong Kong Island; the Government does not feel justified at the present time in pro- ceeding with this portion of the original scheme.
The loan proposal is at present before the Secretary of State and the Govern- ment is awaiting his decision. If the proposal is approved a sum of $2,050,000 | will be made available to meet the estimated deficit and should the estimates prove correct there should be a balance of just under $1,000,000 to meet any unforeseen expenditure. The necessity for charging the Shing Mun Water Scheme to loan was foreshadowed by the late Governor in his Budget speeches in 1924 and 1925. So long as there were surplus balances available Sir R. E. Stubbs rightly refrained from proposing addi- tional taxation or the raising of a loan; the position has however now been reach ed when the balances are exhausted and the Government proposes to act on lines suggested by Sir R. E. Stubbs at the close of his speech when introducing the last Budget.
I do not propose, Sir, to weary Hon- ourable Members by referring in any minute detail to the increases and de- creases in the various Heads of Expendi- ture. Full details will be found in the usual Sessional Paper which is in the hands of every member, and details can more properly be dealt with in Com- mmittee. I should however like to point out that while every effort has been matle in the direction of economy this economy has not been sought by any fictitious reduction of votes below what will ob- viously be required. Where it has been shown that Departments could not be efficiently carried on during the cur- rent year without supplementary sup: ply, the votes have been increased as to obviate so far as possible those continual applications for supple- mentary supply which have been SO prominent a feature of the work of the Finance Committee during the cur- rent year.
SO
I invite the attention of Honourable Members to the new Head 3 Senior
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Clerical and Accounting Staff. This head represents an attempt to do for the Senior Clerical and Accounting Staff what has already been done for the Junior Clerical Staff. The provision of the individual salaries has been deleted from the vari- ous Heads under which the salaries formerly appeared, and the officers have been grouped in a classified scheme which offers considerable advantages in adminis- tration and improved prospects to the officers concerned, while it enables the Government to avoid the almost inevit- able anomalies of the present system. Members of the Finance Committee will no doubt remember that the details of the scheme were laid before them before the matter was referred to the Secretary of State. The distribution of the officers comprised in the scheme is set out in Appendix I. of the printed Estimates.
The increase in the cost of Head 4 Junior Clerical Service is chiefly due to the stipulated increments, but there are additions have been made to the Legal in all twelve new appointments, Five Departments, four to the Colonial Secre- tary's Office, three to the Treasury and two each to the Audit and Post Office. It has been possible to make reductions in some Departments. Details will be found in Appendix 2.
It has been considered advisable to raise the initial salary of shroffs who are required to give security from $450 to $600 or in some cases $700, an alteration which involves an increase of $2,800 ou this Head.
TREASURY
One Assistant Crown Solicitor is pro- vided for. which the Crown Solicitor's Department The present system, under is responsible for collecting all sums due from defaulters in the payment of sums due to Government, bas proved too great a burden for that Department and it has been decided, after careful consideration, to recommend the creation of a new post of Assistant Crown Solicitor attached to the Treasury who will so far as possible deal with all legal work connected with the Treasury and Estate Duty Depart- ments and so enable much needed relief to be given to the over-burdened De partments of the Crown Solicitor and Attorney-General.
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