CO129-597-2 Estimates 1949 1-3-1948 - 14-7-1949 — Page 217

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figure of $150,146,224 was exceeded. The final figure, which is of course still subject to adjustment, was $152,723,306. Similarly, the revised expenditure figure of $120,071,359 contained in the printed Estimates appears, on information which has since become available, to be too high. It now seems probable that the final expenditure will be slightly under $118,000,000. There is every prospect, therefore, that the actual surplus will reach the very satisfactory figure of $35,000,000.

5.

The revenue estimate was deliberately conservative as it seemed unwise, in view of the unsettled conditions in the Far East, to count too much on the continued rapid expansion of the Colony's trade. Moreover, it will be recollected that only a token sum in respect of receipts from the new Earnings and Profits Tax was included as the Appropriation Bill was passed before the standard rate of the new tax had been fixed. In actual fact, 1947/48 turned out to be a boom year for Hong Kong trade and receipts under nearly every head of revenue exceeded the estimate. The continued rise in the population tended to put up receipts from import duties above the Estimates and there were various other factors such as increases in a wide range of licence fees. Expenditure would have been somewhat below the estimate of $109,834,355 but for the payment of arrears of salary to the Public Service, in accordance with the recommendations of the

Salaries Commission, which accounted for some $12,500,000. If the actual surplus proves to be as high as $35,000,000 and this is added to the small general revenue balance of just under half a million dollars carried forward from 1946/47, the surplus carried forward to 1948/49 will be in the region of $35,500,000 instead of the estimated figure of $30,562,300.

6.

Turning now to the Estimates for 1948/49, the main aim has been to achieve a balance between revenue and expenditure without drawing on the surplus with which the financial year 1947/48 closed. When introduced into Legislative Council, the Estimates of revenue and expenditure were as follows:

Revenue Expenditure Surplus

$150,847,950 149,005,007 1,842,943

Select Committee recommended certain additions to the Public Works Extraordinary programme which were duly approved by the Legislature, and this had the effect of raising the expenditure estimate to $150,284,105. The revenue estimate was also increased by the inclusion of the grant of $560,000 from Colonial Development and Welfare Funds in respect of the reclamation at Aberdeen and the improvement of landing facilities at the Kennedy Town Wholesale Fish

Notification of the approval of this grant was contained in your telegram No. 385 of the 22nd March which was only received after the First Reading of the Appropriation Bill had been taken. As a result of these changes, the final

revenue and expenditure figures became:

(1) on 54403/6/4 Market.

7.

Revenue Expenditure Surplus

$151,407,950 150,284,105 1,123,845

In framing the Estimates of Revenue, due weight was given to the various factors which might affect the position, and in particular a reasonable allowance was made for a possible falling off in trade, of which there are already some indications. On this basis, normal revenue was only