1.
The offer of £7.5 million is £870,000 more than the local costs at 1970 prices of HM Armed Forces for internal security and related purposes. The offer of £8 million per anlum vas £390,000 more than the corresponding costs at 1969 prices. These local recurren: costs have gone down by £.48 million: the offer has gone down by £.5 million, but this of course take:. into account the reduction in capital costs as well as recurren. costs.
2.
The Governor's offer of £7.5 million would meet the whole of the estimated recurrent local costs of that proportion of the Garrison required for internal security purposes; in adition it would provide £870,000 per annum towards the capital costs. Under the current agreement Hong Kong provides £5 million per annum to cover recurrent local costs estimated in 1966 at £4.5 million, leaving £.5 million as an annual contri- bution towards capital costs.
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3. The figure of 7.5 million per annum represents un increase of 50 per cent over the existing contribution, a sub- stantial one by anyardstick.
4. On the basis o the Colony's current annual estimates of
revenue and expenditure Hong Kong is devoting 12.25 per cent of its total annual expenditure (capital and recurrent) to defence and internal security measures. In terms of recurrent expen- diture only, the figure is 15.35 per cent.
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