CO129-602-4 Cost of living allowance 27-3-1948 - 11-12-1948 — Page 13

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total family expenditure and although I should not have thought that this applied to all grades regardless of salary it does indicate that expenditure on other services and articles etc. is a considerable factor and if it is true that these are much more expensive in Singapore payment of identical cost of living allowances in the two places would not be justified. I think, therefore, that the Secretary of State should receive some further assurance on these points before consenting to the cost of living allowances now proposed. Incidentally no where in its report does the Committee indicate exactly what the cost of living figure is.

The introduction of cost of living allowances of the same order as that in Singapore and greater than that in Malaya might well be embarrassing to the Malayan Government or to the Treasury or Service Departments. In this connection it has recently been proposed in a letter from the Admiralty to the Treasury that the Colonial Office should be asked to restrain colonial governments from introducing measures which might embarrass the Service Departments. On this question the Secretary of State must, of course, be guided by the circumstances. Measures which in themselves are reasonable cannot very well be delayed without causing colonial governments more embarrassment than their introduction would to the Service Departments.

In this particular case, however I must say

that I feel some doubts.

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C.S.D. are not in a position to ajudicate on the question which I have raised above and I think that it may be necessary to refer back to the Governor and also to consult Malaya and Singapore. In the meantime, in order to avoid holding the proposals up more than is necessary, I suggest that we might agree to the new rates of cost of living allowance for salaries up to 500% inclusive, reserving consideration of cost of living allowances on salaries above that figure for further enquiry. I have suggested 500% as it gives a cost of living allowance little above the maximum now granted.

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Although as stated above I do not feel very happy about these proposals there are four reasons which might be held to justify approving them -

(1) We know that the cost of living in

Singapore is extremely high;

Kong

(2) At the instance of the Treasury we pressed

the Hong Kong Government to adopt the same rate of expiration pay as in Malaya. It seems to me equally logical to adopt the same rates of cost of living allowance. (3) The heavy deduction for rent in Hong Kong

if Government quarters are provided, i.e. 14 2/3 per cent of salary as against less than 5 per cent in Singapore and Malaya

has the effect of reducing Hong Kong salaries well below tuose in Malaya. believe that the majority of officers in Malaya and Singapore are in fact provided with Government quarters. I am not quite certain as to this but it is a relevant point.

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(4) The rates of cost of living allowance now

proposed are far below those paid by commerical firms and may in themselves be regarded as necessary in Hong Kong.

/If