420
X
f
For purposes of conversion the dollar has been taken at 18. 3d. for the payment of sterling salaries and 1s. 23d. for other sterling payments. After deducting the total estimated revenue of $49,861,470, there will be a deficit of $326,708.
The position at 31st March, 1941, is estimated to be as follows :—
Excess of Assets over Liabilities at 1st January, 1939
Revised estimate of Revenue, 1939
13,562,235
40,475,248
54,037.483
Revised estimate of Expenditure, 1939
40,409,957
Estimated excess at 31st December, 1939
13.027,526
Estimated Revenue, 1940/1941
49,861,470
Estimated Expenditure, 1940/1941
63.488.996
50.188.178
Anticipated Excess of Assets over Liabilities at 31st
March. 1941
13,300,818
#
11. The major increases i over the 1939 Estimates (after allowing for the normal 25% increase in view of the fifteen month period covered by the 1940/1941 Estimates), and the reasons for them, are-
(i) Head, Charitable Services: $224,749, increased grants to the Tung
Wah Hospitals and for relief of refugees.
(ii) Head GA, H.K.V.D.C.; $107.303. increased members and equip..
ment.
(iii) Head 6C, Air Raid Precautions: $689,046, completion of equipment
programme.
(iv) Head 16, Medical Department; $490,375, increased staff and more
patients.
(v) Head 17, Miscellaneous Services; $320,704. Special items, 1941 Census $100,000, Hong Kong Centenary $140,000, mamtenance of Chinese internees $60,000, partly offset by savings on other items.
(vi) Head 19, Police Force; $318,303, increased staff.
(vii) Head 2013, Post Office (Wireless); $233,608, new transmitters.
(viii) Head 24A, Public Works Recurrent; $111,700, mainly due to trans-
fers from other Heads and new system of accounting.
(ix) Head 26, Sanitary Department; $117,182, increased staff and main-
tenance expenses owing to larger population.
(x) Head 27B, Labour Office; $92,431, new Head.
(xi) Head 30. Public Works Extraordinary; $1,368,256. See paragraph 12
and separate memorandum by the Hon. D. P. W.
The increases quoted are the excesses over the 1939 provision plus 25%.
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12. The programme of Public Works Extraordinary, which is discussed in detail in a separate memorandum by the Hon. D. P. W., includes provision for the completion or continuation of a number of works now in progress and for the usual items of a more or less recurrent nature. In view of the uncertain outlook it has been decided to suspend completely all work on the new Government House and no funds for it are to be provided in 1940/1941. Provision is included for the starting of certain other new buildings including the Infectious Diseases Hospital, a new Queen's College, Health Centres and a Girls Reformatory.
As before, all new works connected with the Water Undertaking are being charged to Loan Account.
13. The total estimated expenditure of $50,188,178, even after allowing for the extra 3 months covered by the Estimates, is higher than any on record, but if the estimates are realized the surplus of assets will remain at 31st March, 1941. substantially above the ligure of $10,000,000 which has been regarded as a proper reserve. It is true to repeat the statement made last year that the increases in expenditure, where they are not either automatic or forced upon the Government by the current exceptional circumstances, are no more than an attempt to meet needs which have long been recognized as urgent. After deducting extraordinary expendi- ture (Special Expenditure and PWE.), expenditure amounts to only $44,521,304 and is within the ordinary recurrent revenue.
D). LOAN WORKS AND PUBLIC DEBT.
14. Of the total loan of $25,000,000 authorized by Ordinance 11 of 1984, 34% Dollar Bonds to a nominal value of $14,000,000 was issued in 1934 at 99% producing $13,860,000, At the end of 1938 $24.720,017 had been spent, of which $10,860,017 had been met by advances from surplus funds. This method of financing has been continued. By 30th June, 1939, a further $279,983 had been advanced, anaking $11.140,000 in all. The revised estimated total expenditure at 31st December, 1939. is $25,000,000 of which $11,140,000 will have been advanced from surplus funds. In addition, authority has been given for the charg- ing of additional expenditure to a new loan to be raised, expenditure being met in the meantime by advances from revenue. On this new loan account $1,489,180 had been advanced up to 30th June, 1939, and total advances up to 31st December, 1939, are estimated at $2,809,309. Details of both loan accounts are given in Appendix VT to the Estimates.
15. The precise allocation of the 1934 loan funds between individual items has been varied by Resolutions of Legislative Council and is now as shown in Appendix VT (b) to the Estimates; savings have been realized in the net expenditure on the Shing Mun Gorge Dam and other items, and have been made available for other works. It is proposed to close this loan account finally in 1939.
16. New expenditure proposed to be met from loan is almost entirely Water Works expenditure, but includes provision for preliminary investigations into the extension of the Aerodrome. This may eventually be a very large and costly scheme but plans cannot be prepared until the preliminary investigation is completed. It is the intention to finance all new capital expenditure on water from loan for the present. Authority will be sought for the advance of $1,401,086 for the tinuance of works already authorized under loan account; and it is proposed to charge also further works of a total estimated cost of $160,000, of which the whole $160,000 will, it is estimated, he spent in 1940/1941 and will be met for the time being by advances from surplus balances.
con-
17. The total debt at the 31st December, 1938, was $16,598,000, made up of $4.838,000 4% Conversion Loan, 1938, repayable in 1953, against which a sink- ing fund of £66,937 was held; and $11.760,000 34% Dollar Loan, 1934. The latter is the balance of the original sum borrowed, $14,000,000, which is being repaid by annual drawings at the rate of $560,000 per annum. The desirability of raising the balance of the 1934 loan ($11,000,000) is kept continuously under review, but it has been possible so far to meet loan expenditure by advances from surplus balances without reducing the Colony's cash resources below the necessary minimum figure.
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