CO129-584-2 Estimates 1941-2 21-2-1941 - 11-6-1941 — Page 200

Enclosure No.2.

Extract from the

HONG KONG SUNDAY HERALD

dated

19th January, 1941.

The

THE BUDGET

Colony's formidable Budget for 1941-42 has, on the whole, had an excellent recep tion. The eyebrow-lifting rise from an actual expenditure of roughly $38,000,000 in the last casily

financial comparable period, 1939, to an estimated expenditure of $62,389,000 in the next twelve months, goes some- what beyond the sternest anti- cipations. At the same time, the taxpayer's morale has been fortified by evidence that the Colony can take it without un- due strain, and that, allowing 'for new taxation just imposed,

the

revenue for the fifteen months ending March 31st will exceed the original estimate of $50,861,470 by no less than $16,138,948. The actual or- dinary revenue during the first 50 weeks of 1940 was nearly 14 per cent. above the estimate and the return of special war re- venue will be nearer 60 per cent. above the expected yield. The community is, moreover,

accustomed to the

the procedure whereby Financial Secretaries budget disconsolately for heavy deficits, though unstated ex-. pectations generally are that the laudable disposition to err, if at all, on the cautious side, will not be justified by events, and that the happy balance will,

miracuously," be struck.

ture.

It is, moreover, no small point in favour of smooth passage of the Government's proposals that they include substantial pro- vision for special war expendi- More than $5,000,000 is to go towards deliveries in kind, ships, to assist the Imperial war effort, and if there is criticism at all, it is that so large a pro portion of the final total will be spent on less tangible forms of aid. The Colony would be ill-] content to feel that effective: action to give reality to its will to service was lacking. It does not readily digest the fact that the defence of Hong Kong and the prosecution of the war are not. fentirely in different categories.

That is one side of the picture. There is another. It does not follow, because there is a war on and sacrifices are willingly; accepted, that what has been described as the "might-as-well":

should feeling

permit the Estimates to go through without the closest scrutiny, particularly as the Financial Secretary's un- revealed anticipations may, for once, he unfulfilled. The Esti- mates have been prepared on the assumption that the econo- mic activity of the Colony will be maintained at not far short of its present level. There are two factors to be allowed for, whose effect may not yet have been fully felt, a decreased spending power due to higher taxation, and the evacuation.

In estimating revenue, Mr. Butters has undertaken a some- what hazardous task, and that hazard is allied with ordinary expenditure on an unpreceden:- ed scale. The position deserves cautious and logical approach.

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