CONFIDENTIAL
since Her Majesty's Government is unwilling to help solve the
development problem (and we clearly would not wish to divert any
part of our scarce Aid Programme resources to Hong Kong) they had
better leave Hong Kong to solve it in its own way. This is a traditional
attitude in Hong Kong, and it will be heightened by our requirement of a
substantially increased defence contribution.
6. Revenue, both recurrent and capital, for the current financial
year has been estimated at $1885m. (€117m.) which is $101m. (£6.3m.)
above the previous year's figure. At the same time the total expenditure
estimates are up to $1992m. (£124m.), a $114m. (£7.1m.) increase above
the figure for 1966-7. It is anticipated that Hong Kong is now entering
a period of deficit financing; their greatly increased housing
programme and new education policy are the main factors contributing
to this.
Provided confrontation does not lead to economic recession and
reduced Government revenues (of which there is no sign yet) or to any
substantial expenditure on special measures, their general reserves (which
are substantial) are capable of taking the strain of a series of small
deficits.
Hong Kong Department,
October, 1967.
CONFIDENTIAL