(b) But some caution is dictated by the uncertainties of
Hong Kong's future. The rise in revoro end the build-
·ing up of reserves have been the result of a rate of soonmio growth in real tema of 12% to 14% per annus e This has enabled Hong Kong to noct nearly all her current
and capital expenditure out of revenue, with a very low
tax level. But a loss of confidence and a alosing com
of investment could seriously modify this trend and
esuso firanoial difficulties for Government.
(o) In the past, growth in the economy has been entirely the
result of private investment.
Govoriment has been con
cerned mainly with providing good administration, much of the necessary infrastructure, and social services – especially housing. There may however be some doubt as to whether this situation can contime, especially if
thore is any loss of confidenco in Hong Kong and a conse- quential decline in the rate of private investment. There will probably be a need for the public sector to be more closely involved in private sector investment. (a) The first priority in a public investment programme
should be schones required to enable Hong Kong to contim
its economic growth. These might involve action in, or in op-operation with, the private sector, or infra-
structure projects.
(•) Expenditure on social services must be governed by an assessment of social needs in the Colony, and will be
limited by the impact of such schemes on expenditure in
the recurrent budget.
(f) If the scope of a government development policy is to be thus widened, work will be needed to establish priorities in relation to the Colony'a noods and the resources available. This may require sone strengthen- ing of Government's economio staff, and the formulation
of a development plan.
་ 1.