9
16
Some of these such as the improvement of the water supply (a matter which is being dealt with in a separate despatch) are becoming urgent.
35.
No alternative to the Tai Lam Chung reservoir scheme appears to be practicable and while a modified scheme could be financed for some $64 million the cost of the full scheme is expected to exceed $100 million. Then the investigation carried out by the survey marty on the spot seems to indicate that the cost of the projected Deep Bay airport will be more in the region of £10 million than the original estimate of £4 million. There is much lee-way to make up on social services and it will be necessary at some stage to embark on reclamation schemes to provide building sites. The following, therefore, is a very rough appreciation of the future commit- ments that can now be envisaged:-
Water Supply
New Airport
Reclamation schemes
Housing
Hospitals
Schools
Markets
$100,000,000
160,000,000
35,000,000
50,000,000
27,000,000
10,000,000
4,000,000
New Central Abattoir
14,750,000
$400,750,000
The figures in respect of housing, hospitals and schools are little more than guesses and it must be borne in mind that most of the above schemes will involve this Government in greatly increased recurrent expenditure.
36.
Little progress can of course be made with such a formidable programme of capital works while defence and security expenditure absorbs nearly a quarter of the Colony's total revenue. Some reduction in the garrison has, however, taken place and it is my hope that next year it may be possible to agree upon a smaller contribution than the figure of $16 million, which Hong Kong is paying in respect of 1950/51 towards the cost of reinforcements under the terms of the financial settlement recently reached in London. I shall also continue my endeavours to reduce the cost of administration generally. Up to the present such efforts have been largely nullified by security requirements which have necessitated not only a considerable increase in the Police establishment but also the engagement of additional staff to administer the Essential Services Corps, Registration of Persons Scheme, etc. All this, together with increases in the Education staff, have resulted in a rise in Personal Emoluments, including cost of living allow- ances, to nearly $80 million, an increase of $6 million as compared with last year. $3 million of this is due to increases in the scale of cost of living allowances during the year, consequent upon the rise in the retail price index.
37.
Thus two prerequisites to any reduction in the cost of administration are an improvement in the political situation, rendering possible the scaling down of security expenditure, and a fall in the cost of living which would automatically lower the amount expended by Government on such allowances. Unfortunately, there appears to be little prospect of either of these conditions being fulfilled in the near future and, in the meantime, I propose to persevere with less spectacular economies which have already yielded some result. For example, the cost of uniforms has, by standardisation and other means, been lowered by over $70,000 in the last two years in spite of rising prices, while the cost of Government transport has been reduced by over $100,000 in spite of greater demands from newly created departments connected with security services.
38.
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