1
CONFIDENTIAL
X
C
1974
c. Para.14. The percentages given are misleading since they include the total capital cost of all building, including the housing programme. Social welfare accounts for only 2% of the total Budget at present and the cost of the Public Service 43%. The inclusion of capital expenditure in the current Budget distorts the figures.
d. Para.19. The figure for new money mentioned in the Budget Speech was HK$680 m. and not HK$650 m. The Budget Speech certainly referred to the uncertainty about Hong Kong's export markets but
K when the despatch was written the out-turn of the first quarter's figures for exports from Hong Kong were known. They showed an increase of no less than 40% by value. The reference to the raising of taxes by 2.8% obscures the fact that increased depreciation allowances and estate duty concessions will cost HK$31 m. this financial year (estimated). The reference to loans seems to be purely to raising external loans. Economic theology in Hong Kong is against raising internal loans. Perhaps this needs examination. After all, if the Hong Kong banks were able to create vast amounts of credit for gambling on the stock exchange, loans for constructive purposes might be possible without the sort of results Sir John Cowperthwaite always forecast.
e. Para.21.
not so
I think there
really is
Yes
Deffintt
to have
defferential
م
The Budget for 1974-75 was HK$5276 m. not HK$6000 m.
Despatch of 28 May 1974
Para.1. I have already commented on the so-called 'uncertainty about export possibilities'.
a.
b. Para.2. My figures suggest a drop of 12% in real wages in the last year.
C. Para.4. Presumably the Master Pay Scale stops short of superscale posts? In para.13 of my report I advocated that when the Government announced pay increases (which are based on the MCPI) for its own employees, it should encourage private employers to make similar adjustments. Publicity for government action would go some way towards this - and that can be guaranteed in Hong Kong, I suppose.
d. Para.6(c). The reference to extra taxes (as mentioned above) ignores tax concessions. As regards charges for public housing, is there any reason why the houses in the new programme need be so heavily subsidised? Why not build better and charge more? A phased increase in the cost of existing housing would be socially desirable if this made it possible to avoid slowing down the housing programme.
Intridics, and any way
surely new peats are not yet aspeed. I know that 17. Lighttody wants to miss house seats.
CONFIDENTIAL
/e.