CO129-555-2 Estimates 1936 30-8-1935 - 29-1-1937 — Page 91

Enclosure No. 3.

SOUTH CHINA - MORNING POST. FRIDAY,

OCTOBER 4, 1935.

91

DEBATE ON THE

ESTIMATES:

Unofficial Members Demand Economy and

Protest Against Any

Any New Taxes

DEPRESSION EFFECT

COLONY UNABLE TO BEAR FURTHER BURDENS

PAY CUTS AS SOLUTION FOR POSSIBLE DEFICIT NEXT YEAR

GOVERNMENT REPLY

An attack on the Government, condemning as unconstitu- tional its procedure in obtaining the sanction of the Secretary of State regarding proposed new taxation in the event of a deficit in 1936, was made by the Hon. Sir Henry Pollock, on behalf of the Unofficial members of the Legistative Council, during the Budget debate yesterday afternoon.

Sir Henry said the Unofficials were painfully aware of the fact that they were in a hopeless minority in all matters of voting, and that fact surely made it all the more imperative that they should be consulted before any such communication was made to the Secretary of State.

He contended that any deficit which might occur should be met exclusively by cuts in the salaries of Civil Servants, supporting his remark by pointing out that heavy taxes were imposed in 1931 to meet the cost of increased salaries, and that these taxes were still in force. Should there be a sharp drop in the value of the local dollar which unbalanced the Colony's Budget, it was a palpable injustice to make the taxpayers pay

more.

Answering this charge, His Excellency the Officer Adminis- tering the Government, Hon. Mr. N. L. Smith, expressed surprise that Sir Henry should have applied the word "unconstitutional" to the action of the Government. When the final figures for the 1936 Estimates were available, he explained it became clear that a deficit must be anticipated at the agreed rate of exchange of 1s. 8d. It then became immediately necessary to decide whether or not a salary cut should be forthwith recommended as from January 1 next year, and it was finally decided to send a summary of the situation to the Secretary of State by telegraph and his sanction was requested for mention in the introductory speech of a salary revision in certain contingencies. The Secretary of State approved action along these linės and added that the possibility of additional taxation should in his opinion be foreshadowed in the same speech.

Sir William Shenton took a most pessimistic view of the Colony's future on account of the uncertainty of exchange, and with all other Unofficials urged greater economies.