HONG KONG LEGISLATIVE COUNCIL.
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Before proceeding with the details of the budget I propose to deal briefly with the general financial position of the Colony, and in this connection I would ask Honourable Members to refer to my remarks when introducing the Supplementary Supply Bill for 1926 on 23rd June last. We started this year with a Surplus Balance of $3,486,290 of which we regarded $1,400,000 as liquid assets. We budgetted for a deficit of $1,307,305 to be met from the surplus balance. The Estimates of Revenue and Expenditure for the current year have been carefully revised and are shown on pages 5 and 12 of the draft Estimates now in Honourable Members' hands. It will be seen that we anticipate a shortfall of revenue of nearly $500,000 and an under expenditure of some $730,000. Since the figures were printed it has been decided to charge to revenue instead of to the loan the cost of the old site of the Diocesan Boys' School, viz., $253,500 which will reduce our under expenditure to $476,544 and leave us with an estimated deficit on this year's working of $1,302,257 to be met from our estimated liquid balance of $1,400,000. We might, therefore, have expected that we should have to commence next year with a surplus balance of $2,184,033 of which only some $97,000 would be liquid and avail- able. As it happens, however, more of our balances have become liquid during the current year and there should be at least $500,000 available for expenditure at the end of this year without taking into account repayments from loan. To this will have been added before the end of the year the sum of $1,916,406 expended from revenue on the Shing Mun Scheme and reimbursed from the loan. We, therefore, expect to start the year 1928 with a Surplus of Assets over liabilities of $4,100,439 and liquid balances of $2,416,406.
Revenue for the present year has not come in quite as well as we hoped. The new Liquor Duties have not come up to expecta- tions and the total liquor duties show an estimated shortfall of $350,000, Opium Revenue shows a shortage of $200,000, Stamp Duties of $300,000 and Land Sales of $200,000. While the last two no doubt reflect the fact that trade conditions, though certainly improving, are still far from normal, the first two which ought to have shown increases owing to the increased population can only be explained by the extensive smuggling, which we know goes on in spite of all our efforts to prevent it. In view of the shortage this year we have not felt justified in estimating our revenue for next year at more than $20,103,390, approximately four lakhs less than the revised estimate for this year, which has been raised by certain windfalls in the way of interest and miscellaneous receipts on which we cannot rely next
year.
Expenditure is estimated at $22,183,045. This is $131,657 less than the original estimate for this year and $598,387 more than the revised estimate. Estimated expenditure for next year exceeds the estimated revenue by $2,079,655 to meet which we expect to have liquid balances of $2,416,406 available at the end of this year. It may be asked
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