CO129-597-2 Estimates 1949 1-3-1948 - 14-7-1949 — Page 129

EXTRACT FROM FAR EASTERN REVIEW NO.3.

DATED 19th JA UARY, 1949.

132

Public Finance.

Hong Kong's public finance returns show most encouraging results; revenue continually exceeds expenditure and collections as well maintained, Import duty receipts as well as revenue stamp sales are considered as very satisfactory. Of the authorised loan of $150 million (introduced in December 1947) only one third has been issued as the financing of Government works to be covered from loan funds continues to proceed well by utilising the revenue surplus and the floating credit balance of the Department of S. T. & I. The latter has been decreasing but still is adequate to permit financing of many public works without resorting to the issue of another loan instalment of $50 million. Internal revenue (income tax) receipts have exceeded previous estimates and there are still substantial arrears for the preceding fiscal year which should further swell collections for 1948/49.

The revenue surplus at the end of the fiscal year 1946/47, i. e. March 31, 1947, was only $487,434 after a huge deficit was originally estimated. During the fiscal year ending March 31, 1948 a revenue surplus of $36,597,136 accumulated Since then every month has shown a higher general revenue balance and the surplus as at July 31, 1948 (the latest

figures available) stood at $43.1. million. During the four first months of fiscal 1948/49 a surplus of $6.1 million accrued or gl1⁄2 million per average month of the current fiscal year. Against these very favourable actual figures there are the rather pessimistic estimates for the current fiscal year giving $150.2 million for total expenditure and 151.4 for total revenue thus resulting only in a surplus of $1.2 million for 12 months.

The Rehabilitation Loan, 1948, provides for 1948/49 total expenditure of $61.9 million while actual expenditure during the previous fiscal year was $57.2 million. To judge by the performance of steady collections and the continued high level of prosperity of the business community here a further rise in the revenue balance can be taken for certain and thus the

Low Ching floating of a second portion of the Loan appears unlikely.

I Reclam Firm Setemes

In

an

This is not altogether a blessing as the issue of a Government loan might tend to reduce the pressure of idle ifunds part of which are in chronic hibernation here.

connection with a lottery - aprocedure which particularly appeals to Chinese financiers and to the general public amount of $50 million could be easily raised and proceeds employed for new construction works, reclamations and, primarily, the realisation of the new airport scheme. (forwhich the current loan appropriations only show $4 million while the total appropriation is $8 million against an estimated total cost of $70 to 80 million or some $45 million for the initial work and building of runways).

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