3.
SECREI
advantage of both H.M.G. and Hong Kong that the Colony should be as prosperous, contented and internationally reputable as possible when the time for an under- standing with China about its future is reached in the '80s (as described in my despatch of 12th February).
5.
The policies being followed to resolve this complex of problems have frequently been discussed with the Department and are recapitulated in this despatch. It is rather long because of the breadth of the subject, But in simplest terms they are, on the one hand:-
a) to make good the material and social deficiencies, which are the principal concern of the population, by the early or mid-'80s through selective crash programmes.
b) To safeguard the position of lower income groups by schemes of heavily subsidised housing and heavily subsidised or free education and health services, financed from general revenue; and in addition to maintain the incomes of vulnerable groups such as the handicapped, aged or unfortunate by cash payments, supplemented where appropriate by special services, also all financed from general revenue.
c) To maintain a high rate of economic growth to maintain employment and a rising standard of living and obtain the revenue to pay for (a) and (b); and for this latter purpose also to reform the tax system to make it yield the necessary revenue at rates that will still retain, attract and encourage at a high rate the investment on which competitiveness and revenue depend.
d) To increase the contact of the population with and its more active participation in the Colony's administration, by means of the development of grass-roots neighbourhood organisations assisted by the Home Affairs Department.