CO129-582-7 Taxation 6-6-1939 - 5-2-1940 — Page 75

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HONG KONG LEGISLATIVE COUNCIL.

But, speaking in this Council on the 13th October, 1938, I was able to show, on the high authority of the Financial Secretary, that in respect of 1937 the revenue benefited to the extent of over $4,400,000 by the Sino-Japanese conflict. Since then very striking figures have been revealed by the Financial Secretary's Memorandum, to which I have already referred.

Taking, first, 1938. When the Estimate for Revenue was first framed, Revenue was put at just over 30 million. The actual revenue exceeded this estimate by $6,480,935.00, and this excess is attributed by the Financial Secretary "to the increase in the activity of the Colony which prevailed, owing largely to the Sino-Japanese hostilities and the large increase in population due to the same cause."

On the other hand, the original expenditure, put at $33,379,549, exceeded the estimate by $3,796,349.00. But of this excess the Financial Secretary points out that $2,203,216.00 was in respect of unallocated stores, loans and Military Contribution, due to changes in the accounting system, leaving an excess of $1,593133.00 in respect of all other Heads. But the only items that can fairly be attributable to the Sino-Japanese conflict are Head 22, Medical Department (epidemics and larger population $229,513.00), Head 29, Charitable Services (relief of refugees $245,555.00), Head 34, Public Works Extraordinary (construction of refugee camps and acquisition of property $622,052.00), amounting to $1,097,120.00.

The nett gain to the Colony is therefore $5,383,815.00.

Coming, now, to 1939. The original estimated revenue was put at $36,097,325.00 (including $839,704.00 transferred from Government House and City Development Fund). Now this estimate was obviously framed on the basis of the continued operation of the same factors which brought about such striking increases to the Colony revenue in 1938. If this argument is sound, as I think it is, then it can be fairly stated that the nett gain to the Colony in 1939 must be approximately the same as in 1938, on the basis of the original estimate, less any increased expenditure which had not been taken into account in the Estimate of 1939 Expenditure. Of the latter, as shown in Table 3 of the Financial Secretary's Memorandum, the only item I can find relates to Head 5, Charitable Services (relief of refugees), in respect of which the excess over original estimate amounts to $1,241,736.00.

The nett gain to the Colony for 1939, on the basis of the original estimate, is therefore, say, roughly $5,000,000.00 less $1,241,736.00, i.e. $3,758,264.00.

But the revised estimate of revenue of $40,475,248.00 shows an excess of $4,377,923.00 over the original estimate, and if the sum transferred from Government House and City Development Fund ($839,704.00) is deducted from this increase, the increase as shown by the Revised Estimate amounts to $3,538,219.00.

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