CO129-623-9 Estimates of Expenditure- includes a report for the year ending March 1952 1-2-1951 - 30-11-1951 — Page 15

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(c)

Provision has been made for an

increase of 300 in the strength of the Police

Force, and provision has been made for the building of a further block of quarters.

(a) A special increase under Special Expenditure of the Marine Department, in respect of lighters and barges, and another item under special expenditure is to cover the cost of a camp for destitute Nationals.

The Governor draws attention to the appointment of a sub-committee of the Finance Committee to advise on the relative priorities of the number of schemes submitted involving capital expenditure and to fit them in to a five year programme. Under this plan in regard to Education, provision has been made for expenditure of $1 million a year on school buildings, the first priority being a teachers training college. Other details of the current years schemes are explained in the memorandum to the Estimates.

With regard to expenditure from Loan Funds, the Governor points out that these funds are nearing their end, and that the $17 million shown as available for expenditure chiefly represents unspent balances which will gradually

be re-allocated.

The new Director of Public Works has considered the Tai Lam Chung Reservoir scheme and has suggested that a smaller reservoir could be constructed in the first instance at an estimate of $25 million in the first stage and $15 million over the next three years. The only expenditure to be incurred during the present financial year is in connection with the visit of a consulting engineer, and expenditure in 52/53 and 53/54 could be met from the Development Fund.

The establishment of the Essential Commodities Equalisation Fund has been considered on other papers (54466/1/51) and approved, as has been the establishment of the Development Fund. When the Essential Commodities Fund is no longer required, the balance will be transferred to the Development Fund.

The financial year 51/52 will therefore open with an estimated general revenue balance of $1911⁄2 million, a Development Fund of approximately $55 million and an Essential Commodities Equalisa- tion Fund of approximately $30 million.

The Governor sums up by saying that the present financial position is satisfactory, but points out that the effects of the American embargo will be more apparent in 52/53 when it may be nec- essary to impose additional taxation. He also draws attention to the high percentage of expenditure on defence which makes it impossible for the Colony to attempt anything too ambitious in development schemes.

(Sgd.) P. Petherick.

20/6/51.