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has nothing to fear from an Income Tax: his return of income support- ed, where necessary, by a balance sheet or a profit and loss account, neither of which would reveal trade secrets, would normally be accepted without examination of his detailed accounts. This fear of inquisitorial methods is, I am sure, sincere; nevertheless it has no justification in reality.
Peace-Time Revenue
Lastly, in order that I should be completely frank on the subject, I admit my belief that the principal contribution to the peace-time—I repeat, peace-time-revenue of this Colony should come from an Income Tax. Trivial arguments can be rang- ed against its equitability in a com- munity composed of different races with different standards of living: but these arguments have little weight when opposed to the un- deniable basic equity of a tax which is assessed in accordance with ability to pay. More than one un- official Member has reminded me during the debate of the short- comings of this Colony's Administra- tion.
I freely, though with deep regret, agree that in primary education, in facilities for sick poor and sick children, in housing of the poorer classes, in town planning and in other respects the provision made by this Colony is grave lacking.
I do not attempt to disguise from myself the fact that in order to cure that complexity of social ills it would be necessary to raise a great deal more revenue, and I again state my conviction that the only proper way of raising the necessary amount would be by putting the revenue on an Income Tax foundation. A few steps, mostly tentative, have been taken during the last two years towards the solution of the various problems which these social diseases set up but the real fight has got to come.
Social Problems
These latter remarks at such a time as this may be regarded as inopportune. I have made them because I hope that the day may come when I shall preside over a meeting of this Council with a bill before it for the imposition, or re- imposition, of Income Tax as a peace- time measure, in order that we may begin to tackle in practical earnest those social problems. But that is looking some way ahead. The im- mediate question before this Colony, though not to-day before this Council, is whether we should dis- charge our admitted duty to Great Britain by means of an Income Tax or some other revenue-raising mea-
sure or measures.
I ask no more than that those who have reached a conclusion con- clusion contrary to Income Tax should, in the light of the Honour- able the Financial Secretary's speech and the very cogent remarks which have fallen from the honourable and gallant member the General Officer Commanding the British Troops in
China, closely re-examine the lea- sons which led them to that con- clusion, having during the process an open mind and a single eye for the good of the Colony and the Empire.
It is not the case that the whole community of Hongkong is opposed, either in principle or in practice, to the imposition of Income Tax at the present time. I am aware of a grow- ing body of opinion, but European and Chinese, which is in support of that course of action.
I have been asked to widen the terms of reference the expert com- mittee appointed to examine Govern- ment's proposals as framed in a bill. I am prepared to do so on the clear understanding that the committee will first discharge the duty which it accepted on appointment, that is to say to enquire whether an
Income Tax measure suitable to the present moment's needs can be devised. (Applause).
Resolution Passed
The resolution proposed by the Colonial Secletary, seconded by the Financial Secretary, that the Estim- ates of Expenditure for 1940-41 as now present be approved, was then put to the vote and was carried.
On the motion of the Financial Secretary, seconded by the Colonial Secretary, the following Bill was read a first time:
an
"A Bill to apply a sum not exceed- ing $49,706,787 to the Public Service of the Financial year beginning on January 1, 1940, and ending on March 31, 1931, and also to apply additional sum not exceeding $559,- 100 to the Waterworks Renewals and Improvements Fund for the service of that Fund in the said financial year."
following resolutions
The approved:
were
"That this Council approves the carrying out of the loan works at an estimated cost of $4,436,500 and of the expenditure in the financial years 1939 and 1940-1 of the sums of $1,733,576.30 and $1,559,486.03, the cost to be met from a future loan and meanwhile to be charged as advances from the surplus balances of the Colony pending the raising of a loan."
"That this Council approves the expenditure during the financial year 1939 from the balance credited to the Waterworks Renewals and Improvements Fund of the further sum of $5,000 for the Pokfulam Dis- trict Supply."
Resolutions concerning the rescis- sion of the liquor duty schedule which was replaced by a new schedule on October 12 and the in- crease of the duty on petrol and light oils to 60 cents a gallon, were also carried.
On the motion of the Attorney General, second by the Colonial Secletary, it was agreed to change the style of Apothecary and Assis- tant Apothecary to tha of Chief Pharmacist and Pharmacist.
A Bill to amend the Promissary Oaths Ordinance, 1869, was read a third time and passed.
Council adjourned sine-die.
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