CO129-623-9 Estimates of Expenditure- includes a report for the year ending March 1952 1-2-1951 - 30-11-1951 — Page 52

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previous year to pay local duty on consignments which normally pass through the Colony in bond, and revenue from tobacco duties, in which on the best advice available at the time a heavy drop had been allowed for, will probably finish up at a figure only just over $2 million below last year's record figure. Moreover, the re-opening of the port of Shanghai quickly eased the congestion in the local godowns, while the fact that that port was not operating normally tended to increase the volume of goods passing through Hong Kong. resulted in our trade rising to new levels.

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4.

All these factors affected revenue in a very favourable manner, and all the main Heads have exceeded the estimate though in the case of stamp duties the estimated figure was only barely reached. Duties as a whole are responsible for nearly half the revenue surplus and estate duty realised an unexpectedly high total, as a result of a substantial preliminary payment on account in respect of one large estate. Such sources of revenue as rates, royalties from transport companies, bets and sweeps tax, entertainment tax, postal and railway receipts, all maintained a high rate of yield.

5.

The revised expenditure for 1950/51 is estimated at $250,448,999 which includes a sum of $50 million in respect of loan advances charged off to expenditure in accordance with the approval contained in your savingram No.1243 of 2nd December, 1950. If this operation had not been undertaken the revised expenditure figure would have been $200,448,999 which would have been $390,084 less than the approved estimate. This is very satisfactory when it is considered that a contribution of $16 million towards the cost of the present emergency, which was not finalised in time for inclusion in the original estimates, has been paid to His Majesty's Government, and that considerable unforeseen expenditure on security and civil measures for defence has also been incurred during the year.

6.

In order to produce this result a buoyant revenue alone was not sufficient. It was necessary also to cut down expenditure wherever this could be done without loss of efficiency. Appreciable economies were exercised by Heads of Departments in response to an appeal issued early in the year. At that time revenue was not coming in well, so the exercise of a certain measure of economy seemed to be called for, because it was clear that considerable security. expenditure would have to be met which was not provided for in the budget, and it was also necessary to keep in mind the desirability of setting off these loan advances. Efforts to reduce expenditure were assisted by the fact that it proved impossible for various reasons to complete certain items in the Public Works Programme. This resulted in a saving on Public Works Non-Recurrent which is expected to amount to. nearly $7 million.

7.

The net effect of pressing for economies on the one hand and a buoyant revenue on the other was to produce a surplus which, in the light of the later figures available since the estimates were introduced, is expected to amount to some $371⁄2 million. The year 1950/51 opened with a revenue balance of $154,152,842 so when account is taken of the estimated surplus for that year, the financial year 1951/52 is estimated to have opened with a revenue balance of $191 million.

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