CO129-623-8 Estimates of Expenditure- includes a report for the year ending March 1951 1-12-1949 - 31-3-1951 — Page 286

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having regard to the fact that issue only totals fifty millions but I should be grateful for your views on this.

I also feel that the time has come to make some statement re consolidation of a portion of cost of living allowance into basic salary. Present position whereby payments in respect of cost of living allowance amount to two thirds of total paid out in respect of basic salaries and expatriation pay is completely unrealistic and it is obvious that greater part of this allowance can never be discontinued. It is fully realised that consolidation of even small

zcentage of allowance presents many problems and that only statement in the vaguest terms would be possible at this stage. However, the Civil Service Association has been pressing for action and I should be grateful to learn whether you see any objection to inclusion in Budget Speech of statement that question of consolidation of portion of allowance will be taken up with you during coming year.

10. It will also be necessary to touch on question of our contribution towards cost of reinforcements and in this connection I should be grateful if I can be informed whether it would be in order to refer to present procedure whereby expenditure on works carried out on behalf of Military rests where it lies pending final settlement. I trust also that it will be possible to mention proposed conference in April and in doing so it is most desirable that it should be made clear that while this Government is perfectly ready to make contribution in accordance with its means, it feels that question must be considered in relation to claims of various aorts still outstanding from the last war and that it is hoped that conference will take this aspect into account. Would there be any objection to this?

11. In the meantime, two and a half million is being provided for completion of two Military roads in New Territories and our total local expenditure on internal security, excluding loan expenditure and damage to roads by Military vehicles, will amount to twenty four and a half million, or 12.3 per cent of our total expenditure,

Treasury

Lt. Col. Russell Edmunds