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No. 28, Miscellaneous Services, by $432,384, of which $413,118 was due to depreciation of Sterling Funds due to higher dollar sterling exchange.
No. 34, Public Works Extraordinary, by $192,216.
The gross increase on sub-heads amounted to $1,052,196 offset by under-expenditure on other sub-heads of $859,980 resulting in the net increase recorded above.
9. The final figures were Revenue $29,574,286, Expenditure $31,149,156 Deficit $1,574,870, which deducted from the surplus brought forward on 1st January, 1934, gives a total excess of Assets over Liabilities on 31st December, 1934, of $12,248,755.
10. The Inscribed Stock Loans of 1893 and 1906 amounting to £1,485,733 were redeemed on 15th October. The sinking fund for the 4% Conversion Loan raised in 1933 was established on 15th July and amounted at 31st December to £12,311. 2s. 1d.
11. In July, 1934, a 3% Dollar Loan was raised to finance certain public Bonds to the works and to redeem a portion of the sterling Inscribed Stock. amount of $14,000,000 were issued at 99% producing $13,860,000.
1935.
12. The Revenue for the year was estimated at $30,585,650, a decrease of The revised estimate $1,145,975 compared with the approved estimate of 1934. for the year is now placed at $28,328,034 or $2,257,616 less than the approved estimate.
13. The total revenue for the half year ending 30th June amounted to $14,428,847. This is $803,978 less than one half of the estimate of $30,585,650 for the whole year.
14. The principal sources of revenue are shewn in the following tables :--
Total
1st Half Year.
S
Estimate 1985.
1st Quarter, 2nd Quarter.
$
Import Duty on Liquor
9.50,000
215,621
171,488
Import Duty on Tobacco
2,750,000
673,018
625,556
387,109
1,298,574
Duty on Locally Manufactur-
ed Liquor
1,070,000
299,574
194,659
494,233
Port & Harbour Dues
610,000
133,341
120,818
254,154
Ferries
406,000
101,599
101,599
203,198
Liquor Licences
390,000
104,518
48,880
153,398
Opium Monopoly
650,000
106,711
94,908
201,619
Assessed Taxes (Rates)..
6,300,000
1,540,148
1,560,605
8,100,753
Estate Duty
1,000,000
134,011
509,171
648,182
Stamp Duties
2,100,000
490,940
480,082
971,022
Water Excess & Meter Rents.
1,900,000
605,859
370,789
394,286 976648
Message Fees (Wireless)
630,000
158,481
165,785
565,003 $24266
Postage
1,220,000
292,072
273,611
976,048 565683
Kowloon Canton Railway
1,692,900
379,362
357,277
736,639
Rent of Governinent Property
1,688,000
398,276
380,794
779,070
Land Sales
600,000
64,781
110,147
174,878
3
15. It will be seen that the duty on tobacco has almost been maintained, but there may be a further drop during the second half of the year owing to the higher rate of exchange prevailing. Import duty on liquor shows a large falling off and is disappointing. The Opium Monopoly again does not come up to expectations and it would seem that this source of revenue is dwindling to nothing. Estate duty con- tinues to hold its own but Land Sales have fallen away.
16. Expenditure for the year was originally estimated at $32,556,102 or $1,970,452 more than the estimate of Revenue. As the original estimates were based on an exchange of $1=1s/id., and as the average rate for the first six months of the year worked out at $1=2s./0d., it is evident that considerable savings will be effected. The revised figures for each head of revenue and each head of expenditure are shewn in the draft estimates for 1936. The totals are expenditure $28,481,000 and revenue $28,328,034, a deficit of $152,966. The revised expen- diture figures are based on a 25/- dollar so that should its sterling value decline the deficit of $152,966 will, of course, increase. This estimated deficit therefore, will reduce the excess of assets over liabilities of $12,248,755 on the 1st January, 1935, to $12,095,789 on the 31st December, 1935
1936.
17. The estimated revenue for 1936 amounts to $26,671,845 a decrease of $3,913,805 as compared with the estimates for 1935. It will be remembered that from 1st September, 1934, the charges for excess water were reduced by 15% to all who pay their accounts within fourteen days. It has now been decided to make a further reduction. The charge for excess water will, in future, be at the rate of 50 cents per 1,000 gallons instead of 75 cents, with a further 15% off for all who pay within 14 days. This means a reduction of approximately $580,000 in revenue and a reference to this subhead in the draft revenue estimates will show that the receipts are estimated for 1936 at $1,414,000 as against $1,900,000 for 1935. An offset to the reduction is, however, allowed for to the amount of $100,000 for increased services and possibly increased consumption.
18. The revenue from Duties is estimated to produce $5,335,000, a decrease to $178,000 on the estimate for 1935 or $372,389 below the actual receipts for 1934.
19. The receipts from Head 3, Licences and Internal Revenue, have been reduced to $12,769,495, a falling off of $1,823,355 compared with the original estimate of 1935. The highest amount under this head was collected in 1933 with a total of $16,664,799. Small increases are expected to be realised from increased number of motor vehices, motor drivers and the special licensing fee for foreign registration. Also the receipts from wireless receiving licences still continue to grow owing to the progressive policy of the the local broadcasting service. Un- fortunately these minor increases do not set off the reductions in the receipts from the other subheads of this most important Head of Revenue under which nearly 48% of the Colony's revenue is brought to account.
20. The largest reduction this year occurs under Assessed Taxes (Rates) the amount inserted for 1936 being $5,800,000 as against $6,300,000 for 1935, a falling off of $500,000. The largest amount ever collected was $6,434,968 in 1933. The reduction is due to decreased valuation and to the greater number of vacant tenements. As refunds are now made for vacant floors of tenements there are consequently a larger number to be dealt with involving a reduction in the net annual The rateable value for 1935/36 amounts to $36,374,100 receipts from this source. compared with $38,641,836 last year, a decrease of $2,267,756 or 5.87% due to the fall in rents. If the interim valuations are deducted from the new total valua- tion of the Colony the decrease this year is 6.68%. The reductions made in the assessment of Chinese tenement houses averaged round about 124%. The reduction in rentals of both office property and dwellings continues and the valuation for 1936/37 will, it is feared, shew a further contraction.
21. A reduction of $480,000 has been estimated for excess water supply and has already been mentioned in paragraph 17 of this memo.
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