6
73
parents can afford.' It is open to doubt whether that is true now; in 1933 the fees were $90-i.e., just about one seventh of the gross cost per head. $90 means in sterling from about £4 10s. to about £9, according to the rate of exchange. There would not appear to be any hardship in making the parents con- tribute a rather higher proportion of the total cost, and this could be done either by increasing the fees or by reducing the staff, or both."
New School Built
For boys whose average attendance in 1935 came to 230 a new school has just been opened, built at a cost of about half a million dollars, with playing grounds sufficient for two large football fields, tennis courts, and a pavilion. According to the Director's Report for 1935 the total enrolment in all schools, Government or otherwise, is as follows:-
In Vernacular Schools In English Schools
58,394 17,086
I cannot readily call to mind any Vernacular School which possesses recreational grounds, and the re- creational facilities for other English Schools are either non-existent, or utterly inadequate.
Considerations, such as the above, make SO much more tragic the lament of the Director in his speech at the opening of the new Central British School, of the absence of recreational facilities for Queen's College. The Director said: "I ain .thinking.....of a stronghold of young people, surrounded by a strip of green and enveloped in quietness, and above all, in the air, essentially a 'castle in the air', just such a place as Your Excellency has to-day thrown open to our British boys and girls. I ask no more and no less, for our premier Chinese .school.
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I beg respectfully to associate myself with the Director in his hope, and his request.
Excess Water Charges I propose now to make
a few observations on the question of Hongkong property in relation to rates and excess water charges.
: insututions),
In the Report on the Economic Position of Hongkong published in ¦ February 1935, the Commissioner pointed out that in 1934 the rateable value stood at $38,641,856, and that
this figure, capitalised on the basis of 7 per cent. per annum, represented an investment in rateable property of no less than five hundred and fifty million dollars. After pointing out that the total value of the shares of local companies (other than financial¦
usted by the
Stock Exchange amounted to approximate- ly one hundred and fifty million dollars (which, of course, consisted to an appreciable extent of invest- ments in property), that the estimat- ed total investment in Chinese fac- tories or in Chinese industry in the Colony amounted to about fifty million dollars, and that the total
amounted to about note issue hundred and sixty million dollars (of which a great part is held outside the Colony), the Commissioners ob- served: "These comparative figures serve to make it abundantly clear that a very large portion, if not the bulk, of the wealth of the Colony, is represented by property. That this must be so is hardly surprising in a territory where there is little agricul- ture, almost a complete absence of any trace of mineral wealth, where industry is still only in its infancy." (See page 8 of the Report).
one
and
The new rateable value for 1936 to 1937 is at the reduced figure of $34,643,760.00, but even this figure, capitalised on the same basis, re- presents an investment of nearly five hundred million dollars. The impor-
tance of Hongkong property as an asset, though no doubt generally inadequately appreciated, is obvious.
The Commissioners reported that property values were very depressed and that it was extremely difficult to negotiate the sale of any property. Four main causes for this state of affairs were suggested by the Com- missioners, two of which were exces- sive charges for water (in the case of Chinese property), and rates.
As regards rates, which were some years ago raised from 13 per cent. to 17 per cent., in view of the present financial position of the Colony, I can only respectfully concur in the Com- missioners' observation that:-"While it may not be possible to restore the old rate of taxation, we consider that in view of the severe depression in property it should be Government's aim to bring about some reduction at the earliest possible moment."
Relief Needed
If no alleviation can at present be given in regard to rates I submit that something can, and should be, done in regard to excessive charges for water which, as the Commissioners remarked:-"may be fairly described as unreasonably high, and have had a | serious effect in making such pro- perty unsaleable." In the Com- missioners' view "clearly some relief here is overdue".
That the property market has not improved but has, on the contrary, deteriorated, is clearly shown by the Hon. the Colonial Treasurer's report on the Assessments for the year 1936 to 1937. In this report it can be seen that the rateable value in respect of 1934 to 1935 of just over thirty eight and a half million dollars dropped, in respect of 1935 to 1936, to less than thirty six and a half million dollars, and again dropped, in respect of 1936 to 1937, to just over thirty four million dollars. As the Hon. the Colonial Treasurer observed, this is the third successive annual valua- tion showing a decrease and "there has been no instance of a decrease being shown in three successive annual valuations for the last fifty years".
I do not forget the recent reduction in the charges for excess water consumption and the discounts allow- ed for prompt payment. But these measures, which are gratefully ap- preciated, do not go to the root of the problem which is merely this, that the landlord is under the liability to pay an unascertained and unascer- tainable amount for a supply over which he can exercise no effective, or any, control.
It may be recalled that one of the main grounds for the introduction of universal meterage was, not to obtain an increase in revenue out of a sheer necessity of life, but to pre- vent waste, and yet, as the Commis- sioners clearly showed, "the preven- tion of waste is mainly dependent upon the measure of physical control exercised by the Water Authority in any given year, and that the factor of prevention by economic pressure is not operative under
present system", and the Commissioners held that "it is difficult in the face of this evidence to regard our present system of water charges, based on a 'valuation' supply plus 'extras', as being either equitable in incidence or efficacious in prevention of waste".
Big Profit
our
The Hon. the Director of Public Works was kind enough to supply me with certain figures in respect of the period to 1935. The figures show expenditure for maintaining water works on the one hand (which com- prises Public Works Recurrent and Salaries attributable to the water works), and, on the other hand, the net revenue derived for Water (which
1
comprises water excess charges and the "water rates” (2 out of the 17 per cent. assessment).
From 1920 to 1935 the total expenditure for the whole period amounted to just over $7,000,000, and the total revenue came to just over $22,800,000, showing a net profit obtained by Government from Water of about $15,800,000. The excess of the revenue over expenditure for period 1920 to 1927 comes to $4,351,846.17, and for the period 1928 to 1935 comes to $11,473,060.24.
I understand that the total ex- penditure for the Water Works of the Colony, up to the end of 1935, came to approximately $28,600,000. But submit that as regards expenditure incurred prior to 1927, it has been more than repaid from Water Revenue obtained. And, as far as I can make out, capital expended since 1927 is as follows:-
Loan Works Under 1927 Ordinance.
1st
Section Shing
Mun Valley Scheme $ 3,500,000.00 Under 1934 Ordinance.
Revised Estimated Cost-Aberdeen Val-
ley Water Scheme ..$ 2,555,702.78 Shing Mun: Balance
of 1st Section and whole of 2nd Sec- tion
.$ 9,941,877.98
$15,997,580.76
Government has all along stated that it has no wish to make money out of water supplied to the inhabi- tants, and I submit that the only fair way of computing the cost of water supplied is to ascertain the amount payable for interest on the amount of the new capital outlay, the amount payable for the annual reduction and repayment of the loan, and for the cost of maintenance. On this basis my figures are as follows:-
Total loan attributable to Water Works from 1927 to date-say $16,000,000.
Yearly reduction of 1/12th. $ 640,000 Interest at 32% P.W.R. and Salaries, say
560,000 500,000
$1,700,000
According to the Draft Estimates the revenue from rates is computed at $5,600,000, representing 17 per cent. of the Assessment. 2/17ths of this is in respect of water, amounting to $658,824: the estimated revenue for water excess supply and metre rents for 1937 is $1,775,000, making a total of $2,433,824. (I am not clear to whether the above revenue includes payments received by Government for water supplied to steamers at Hongkong).
as
As any revenue for water exceed- ing $1,700,000 constitutes an exces- sive charge, I submit that the exces- sive charge for water on the Budget figures comes to over $700,000 for the current year.
a
An Alternative
Now that we have an assured supply from the Jubilee Reservoir I suggest that all excess water charges be abolished and that, in lieu thereof, an additional 3 per cent. on the Assessments be raised as separate "Excess Water Tax". This tax will bring in just short of one million dollars this year, and as the abolition of excess water charges wi!! have the effect of improving the property market the rateable value of property in Hongkong will rise, and the amount represented by the new tax will correspondingly increase. On the other hand, by the abolition of excess water charges, there will be a very heavy saving in personnel and administration in the P.W.D.
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