CONFIDENTIAL
RECEIVED IN
HKK 5/20
REGISTRY No. 51
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Mr Stuart
16 APR 1974
Mr Youde
Sir D Watson Watson
HONG KONG BUDGET
АКК 520
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1. Mr Haddon Cave presented his third budget on 27 February
(Hong Kong telegram number 258).
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17
2. The budget underlines the continuing buoyancy of the Colony's
economy. As in past years there is a budget surplus estimated at
a minimum of HK$433 million. The Gross Domestic Product increased
in 1973 by 20% in money terms to HK$28,335 million and is
expected to rise in 1974 by a further 14-15% in money terms (4% in
real terms) to HK$32,400 million.
TAX AND POLICY CHANGES
3.
There are a number of relatively minor tax increases amounting
to HK$175 million. The most contentious appears to be a fairly
sharp increase in vehicle licenses and first registration charges.
4. The Financial Secretary's proposal to exempt from withholding
tax the interest paid on foreign currency deposits which he made
in last year's budget has now formally been dropped.
EXPENDITURE ON CAPITAL WORKS AND
FORECASTS OF TAX CHANGES
5. It is the field of capital works finance that presents the
Financial Secretary with the biggest problem. The cost of the ten
year order of capital works projects is HK$25,000 million at 1974
prices. This breaks down as 37% for public housing and the 3 new
/towns,
CONFIDENTIAL