C. S. O.
(M.F. 237.
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we
mon s ago our financial position seemed so strong that my feeling was that though there were many urgent needs which had to be met, the money was available and the
only question was whether could carry out the work with sufficient expedition. As the months passed, however, it became clear that the position was not so bright as I had hoped. What is called the economic blizzard struck the Colony perhaps
a lit-
tle later than it struck other Colonies; but when it did come it struck with the decision of a true typhoon, but without any of the compensations which come with a typhoon and unfortunately not so brief in duration.
The effect is reflected in the revised revenue figures for the current year.
un-
As the Colonial Secretary has pointed out, were it not for two large windfalls, the revised estimate for the current year would be four million dollars be- low the original estimate. The large sum realized from the late Lord Inchcape's estate has doubtedly enabled us to provide for several services which would otherwise have had to be post- poned. The proceeds of the sale of part of the City Hall is separate item to which I will re- fer again later. At the present moment I am afraid I can see little hope of improvement in the estimated figures for 1934; and, indeed, I have a somewhat un- comfortable feeling that I may have increased some of the figures beyond what may prove to
be justifiable.
(12)
thing spectacular, but it must be conceded that provision has been made for a number of important works and that it shows signs of steady progress.
Causes for Congratulation.
I confess therefore to
some surprise
the at learning from Senior Unofficial member's speech that perhaps the only cause for congratulation is that no increase of taxation is considered neces-
sary.
We have been able to make some provision out of Revenue Account for a new Government Civil Hospital, for several much needed Markets. for a new impor- tant Police Station, for Senior Officers Quarters, for improve- ments to certain Roads, for Anti- Malarial works, for a new Central British School, for important Harbour Dredging work and Re- clamation connected therewith, and certain Water Works. From Loan funds we have made pro- vision for other Water Works, in- cluding the Gorge Dam at Shing Mun, for a second cross-harbou Pipe Line, for the new Gaol and for certain improvements to the Air Port.
The fact that we have been able to provide for a
this considerable number of important services is evidence of what may be reason- ably termed a strong financial position. It entails, however, our taking a sum of over $1,600,000 out of Surplus Balances, and I confess that I felt some anxiety when considering the commit- ments involved by these works, having regard to the fact that we cannot look to much, if any, improvement in the Revenue dur- ing 1934. This will mean that we shall have to draw further from Surplus Balances to continue the work, and the Budget shows that the estimated Surplus Balances, apart from the City Hall Account. at the end of 1934 will be less than ten and a half millions,
Credit Balances.
fortunate, there- in
are
We fore, in finding ourselves possession of considerable surplus balances. 1 feel convinced that the policy of aiming at a minimum surplus of ten million dollars, which I laid down early last year, is a sound one, though there are no doubt critics, few in number how- ever, who consider the conserva- tion of such an amount excessive. In a colony like this, which is based on a variable currency, I have no doubt in my own mind that it is essential to keep a sub- stantial margin. The policy which I have followed this year and last year of submitting supplementary budget when it appeared, largely owing to the maintenance of the dollar at favourable figure, that there would be more money available than was anticipated, is some- what unusual, but I think it has been justified and it has received the approval of this Council and the Secretary of State. It remains to be seen whether similar action will be possible next year, though I confess that at the moment I am not optimistic about it.
With this serious drop of Re- venue it is perhaps natural that the Budget should contain
no-
a
a
Saving on Exchange.
The prospect at first sight seems, perhaps, a little perturbing. It always happens, however, that with a large personnel
many posts are vacant for brief periods during the year, resulting in a considerable saving in the total. This over the whole year will probably amount to several lakhs of dollars. If the dollar continues at
or only a little below the present figure, there will be a further considerable saving in the dollar equivalent of sterling com- mitments. There will also be a falling off in the dollar revenue realised from such imposts as are based on sterling, but this will be much smaller than the amount saved sterling commitments. There is also a sum to be transferred from Suspense Account in respect of certain amounts which have been held back pending the settlement of some outstanding questions
on
45
connected with Military Contri- bution. The determination of the exact figure awaits the approval of the Secretary of State of the amending Ordinance; but it will probably amount to the greater part of the sum entered against "Suspense Account." It is also to be noted, as the Colonial Secretary has pointed out, that we shall have eventually the present site of the Government Civil Hospital and the site of the Naval Arsenal for disposal when the new works are completed. Therefore, should it be necessary temporarily to reduce our Surplus Balances to some extent, the deficiency would be made good by such disposal. I feel, therefore, that we are on reasonably safe ground in embark- ing on such commitments as are being undertaken.
Alarming Falls.
even
With regard to Revenue, the the heads of falling off under Duties and Opium has been some- The estimate of what alarming.
revenue from Tobacco Duties was seriously over-estimated, though I have for some years past, both in Malaya and in Hongkong, found this source of revenue a steadily improving one. No doubt some of the falling off is due to increased manufacture in the Colony, result- ing in the importation of a larger amount of non-manufactured to- bacco, with a lower rate of duty, and a less amount of manufactured tobacco. The suggestion of the Senior Unofficial Member that, as drinks and smokes are perhaps the last things which people ordinari- ly, forego, (as they are), we might cbtain larger consumption and more revenue by reducing the duties liquor and tobacco, strikes me as somewhat of a "non sequitur." The point, however, might be further considered.
on
My honourable friend thé Colonial Secretary has dealt with the question of Opium. No doubt some of the falling off in revenue both from import duties and opium is due to smuggling, and I trust that the provision of additional Revenue Officers for the New Territories will result in some improvement, though I doubt whether it will be very large. I would only add that the problem which at one time loomed rather large, namely, what we should have to do to replace the revenue from opium if the policy of entire abolition were adopted, seems likely to solve itself, for the re- venue under this head has dropped so much that its entire disappear- ance will not have a very marked effect.
Water Charges.
The estimated revenue for the
forthcoming year under Water Supply and Meter Rents shows a considerable increase due, in a large measure, to the adoption of universal meterage. The ques- tion of charges for water supply is one which will have to be seriously
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