75
included. A grant of $250,000 was made by Supplementary Vote in respect of the last six months of the year just ended. It was felt to be only proper that the Government should make some contribution towards the cost of welfare activities among the garrison and it was considered better to do so in this way than by a reduction in the duty on beer for Service personnel as was at one time suggested. Under the grant system the money can be used in a variety of ways, whereas under the latter system no one would benefit to any appreciable extent and some would not benefit at all. It has proved necessary, owing to the general rise in costs, to increase the subsidy to the Tung Wah group of hospitals by just over half a million dollars, and the cost of the subsidy to vernacular schools has also risen by the same amount.
32.
In addition to the expenditure provided for in the Appropriation Bill, expenditure from loan funds is being continued. Up to the 31st March, 1949, expenditure from this source amounted to $87,652,668 and it is estimated that by the 31st March, 1950, this figure may have been increased to $113,671,730, which of course is largely financed from surplus balances. Over $12 million was originally earmarked for new rolling stock for the Kowloon Canton Railway, but as a result of recent developments and the interruption of through traffic to Canton, certain aders, including dining cars, have been cancelled. This has released substantial loan funds for re- allocation. $8 million is earmarked for the new airport and some preliminary charges have already been incurred as a survey party has now considered the lay-out of the site. When work starts in earnest, it will be necessary to draw on the interest free loan of £3 million which His Majesty's Government agreed to grant under the 1948 war expenditure settlement. Present indications are, however, that the cost of the new airport will be very greatly in excess of the initial estimate of £4 million. $3,888,500 from loan funds has been provided for the completion of a number of Police stations and a further $2,045,000 will be expended on new schools during the present year.
33. Only $50 million of the $150 million Rehabilitation Loan authorised has so far been raised and the prospects of any further issue in the immediate future are poor. Up to the 31st March, 1950, loan funds actually expended were estimated to total some $1132 million of which $63 million has been met from loan advances. As you pointed out in paragraph 2 of your telegram No. 326 of the 7th March, there would now be advantages in setting off against surplus balances such portion of these loan advances as would leave the equivalent of six months revenue in reserve to provide against unforeseen contingencies. This matter was discussed by the Financial Secretary during his recent visit to London and it was decided that the most satis- factory method of dealing with this advance account would be to remove selected sub-items from the loan schedule and charge them off to expenditure. I shall be addressing you separately in regard to this proposal.
150
34. Assuming that $50 million of these loan advances are charged off to expenditure, the surplus balances at the disposal of this Government, which on the 31st March were estimated at just over $150 million, will be reduced to about $100 million. But by the end of the present financial year $371⁄2 million of this will be committed against present and future loan advances. At the moment, there is no prospect whatsoever of further borrowings on the local market and it is still only possible to allow the colonies very limited access to the London market. While the Public Works programme on which a start has been made, together with future construction work of a comparatively inexpensive nature, can be financed from revenue so long as it can be spread over a sufficient period, there are a number of schemes which are too costly to be financed from the Budget.
Some.
No comments yet.
Private notes are available after approval.