61
No Alternatives
I have not had the opportunity of hearing any reasonable alternatives to Income Tax. There have been such suggestions as lotteries, tax on cinema tickets, food, land tax and so on. None of them, I am sure, Hon. Members will accept as reasonable. Increases of indirect taxation on petrol and wine have also been sug- gested, but they again do not fall upon those best able to bear them. Mr. Dodwell may have to spend £30 more on petrol and Mr. Pearce may have a wine bill of £100, but it is of no interest to them-it is only of great interest to those with an income of about £500 a year.
Fears have been freely expressed on the consequence of the financial stability of the Colony were Income Tax to be imposed. I have no know- edge to dispute these facts because I have obviously no information on that subject, but it seems to be the risks must be taken and the possible consequence of Income Tax must be accepted in certain circumstances.
Tax Evasion
a
Another point is on the question of tax evasion on which great emphasis has been laid. Efforts will no doubt be made to avoid taxes. In every country of the world there are number of people who do their utmost to evade taxes, and in this Colony there will no doubt be tax evasion, but should Government avoid doing the right thing on account of this. if there is a necessity for the tax? In India they have for many years had Income Tax and there, understand, in small businesses three sets of books are kept, so it is quite possible in Hongkong four sets of books will be kept, but that is no argument against introducing what is the best form of revenue.
No
The tax proposed by the Govern- ment so far, I am sure, is a relative- ly small one and the burden will fall on the shoulders of those well capable of bearing it, and it is to be hoped very much that the Government will not to make further demands. one likes to pay Income Tax, but I I am certain the opposition is not due to personal grounds. However, I do feel it is possible and I hope Hon. Members will not misunderstand my attitude in speaking on this subject. The conclusions reached have been perhaps a little too hasty and before the Government's proposal is fully known. I do think that a great many are not satisfied with the attitude taken by the majority of those who oppose Income Tax. I therefore hope they will be given an opportunity to reconsider the question.
This is a very important measure. If Income Tax is not accepted it will certainly not add to the reputation of Hongkong. I am convinced that: the Government's proposals are the only ones to deal with the situation and I hope very much that time will be available for reconsideration of this Bill. (Applause).
COLONIAL SECRETARY
"Education Problem Will Be Carefully Considered"
RECRUITING LOCALLY
The Colonial Secretary: Sir, This debate has been so predominantly a
debate on Income Tax that there remains little for me to say on the so-called Ordinary Budget, which is the subject of the resolution stand- ing in my name. I am grateful to Unofficial Members for the assistance which they have rendered in Com- mittee since the Council meeting of October 12, and for their unanimous agreement with the Government's proposals, as modified by that Com- mittee, which are now presented.
The points which Mr. Li Tse-fong has raised on the subject of educa- tion will be carefully considered by the Director of Education, and Mr. Li will no doubt pursue them fur- ther in the Board of Education of which he is a member. I would only say that the newly established Tea- chers Training College and the re- vised code of subsidies for vernacu- lar schools indicate that, although much still remains to be done when funds permit, the improvement of vernacular education has not been unduly neglected. As to the con- stitution and organisation of the said Board, any suggestions which it may choose to submit on these questions will be sympathetically considered.
Locally Recruited Officers
The same member raises the ques- tion of providing Air Raid Precau- tions Shelters for the general popu- · lation. On this subject made a full statement at the meeting of this Council on June 29, 1939, and here is, I fear, nothing that I can usefully add to that statement.
Mr. D'Almada has revived the question of increasing the number of locally recruited officers in the Gov- ernment service. I can only repeat
that this form of economy is still the considered policy of the Government whenever it can be shown that the duties of a post can be performed by such infiltration without loss of efficiency. The Chinese Sanitary In- spectors, for example, are gradually allowing reductions to be made in the European staff, and I understand that the experiments of recruiting
Chinese for senior posts in the Police is working satisfactorily. A scrutiny of past and present estimates will show how far this policy has ad- vanced in the Medical Department.
Mr. Dodwell has raised two ques- tions which are not entirely within the competence of this Government. The disciplinary control over Gov- ernment servants and particularly
the steps necessary to dismiss officers in case of incompetence are common to all Colonies; and the same is true of the system on which stores are purchased through the Crown Agents.
Mr. Dodwell and Mr. Pearce de- plore the growing costliness of the machinery of Government, but sev- eral members suggest an expansion in various directions of the social services which it undertakes, and particularly an acceptance of certain of the liabilities which are now the concern of charitable organisations.
An Agreed Policy
It can hardly be doubted that, as soon as we have time to think of anything except the war, it will be necessary to come to some agreed policy on the balancing of such claims, including of course the pro- priety of the direct financing of cer- tain services, as Mr. M. K. Lo sug- gests, which are at present under- taken by the various charitable or- ganisations with or without subsidies from public funds.
I hardly think that a "profit and loss account" such as Mr. M. K. Lo has attempted on the effect on the Colony of China's recent troubles is
entirely justifiable. The security to life and property which Hongkong has always offered has certainly for the last quarter of a century been one of our principal assets as the Financial Secretary has pointed out; and even if that has stood out rather more sharply since 1927 this funda- mental fact remains as before.
a
Air Raid Precautions The acceleration of the Air Raid Precautions programme to which Mr. Pearce has referred, is, as Honourable Members are aware, deliberate policy. Capital expendi- ture which in more normal times might have been spread over a num- ber of years has already been met in part by supplementary votes dur- ing the current year, funds being readily available, and the funds to be voted for 1940/41 merely continue that policy. Such special expendi- ture is of course non-recurrent and imposes no commitment on posterity.
Both Mr. Shields and Mr. Pearce have suggested that the uncertainty of the Colony's financial future should have been reflected in the Ordinary Budget which is now be- fore us, and that it would have been prudent to aim at a considerable ad- Li dition to surplus balances. Mr. Tse-fong on the other hand agrees that current activities should be dis- turbed as little as possible, and this of course is the general view of His Majesty's Government at home. It would savour of unreality to make no provision for war expenses in 1940 and it is fair to point out that if the transfers suggested are made to the proposed War Budget, the present deficit of about half a million on the ordinary budget will at once become a surplus of about two mil- lion dollars. (Applause).
GOVERNOR SPEAKS
Four Assurances On Tax Question
HASTY OPINIONS
His Excellency The Governor said: Honourable Members:
All the main points relative to the 1940-41 estimates which have been raised on the Unofficial side of the Council during the two days of debate have been answered, and in my opinion answered adequately. I have, therefore, nothing to add to those answers, but I will re-
new the undertaking given by the honourable gentleman, the Financial Secretary, on October 12 by reiterating that Government, in put- ting into effect the approval given by you to those estimates, will keep a close watch upon the revenue and govern its expenditure both on pub- lic works and in respect of the filling of new appointments in accordance with the financial outlook from time to time.
The subject which has occupied almost the whole of the debate, how- ever, is not reflected in the estimates. On October 12 în my address I out- lined to the Council a proposal for a war-budget, on the expenditure side of which the largest item would be Hongkong's contribution to the re- cources of His Majesty's Government for the successful conduct of the life and death struggle in which Great Britain is engaged.
No comments yet.
Private notes are available after approval.