CO129-623-8 Estimates of Expenditure- includes a report for the year ending March 1951 1-12-1949 - 31-3-1951 — Page 16

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revenue the several essential development schemes (of which the Tai Lam Chung Reservoir and the Deep Bay Airport are the most important) which are expected to cost in all about $400 million. The Governor says that what is mainly needed in order to reduce the cost of administration and thus to free revenue for such schemes is:-(a) a reduction in security expenditure and (b) a reduction in cost of living neither of which he thinks is very likely. with regard to (a) he hopes that it may be possible to agree on a figure smaller than $16 million for the contribution towards the cost of the garrison for 1951/52; the Treasury on the other hand hopes that Hong Kong will continue to contribute at this rate even if the garrison is reduced in size. It seems to me that neither (a) nor (b) can be relied on and if Hong Kong is to go ahead with necessary development some way will have to be found to enable her to raise money and that fairly rapidly as the water supply position is becoming urgent and work seems likely to start soon at the airport the two most costly of the development schemes.

G

7.I have not yet studied the memorandum on the Estimates enclosed in (14) but instead I am sending the file to Mr. Palmer, Mr. Bourdillon and Mr. Hall so that they may be aware of the contents of the Governor's despatch prior to any meetings which may be necessary with the Governor, who arrives here on leave tomorrow. When the file is again free a copy of (14) with enclosures should go to the Treasury and consideration should be given to approving the Estimates.

~.

14th June, 1950.

After allowing for the 'Defence' contribution

9416m (km), AK deficit of $12.5m.

the

rate

registration tax,

one

m 194

އ

bragating for a In apite of

of Profili Tax

the

revenne

and the

the

estrusale

fifth less than the actual

1949/50-

about $250 m.,

to the actual revenue

increase

bravers

$204m

revenue

about equal

It is

19489.

hoped that

the estimate

will

644

prove

to have been

the

on

the

As regards

to be

K

the event,

conservative side!

accumulated surplus

of $150 milhor's at 1. 4. 50, of all outstanding loan

charges

are

Del

A