2.
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However, past experience (e.g. over the limitation of hours
of work for women) has shown there can be local resistance to change. We attach particular importance therefore to monitoring this programme and would like to see a timetable for legislation (where this is not already provided for) as soon as possible.
3. This programme will need to take into account the desirability of progress in applying International Labour Conventions which is now the subject of regular ministerial review.
4. The Planning Paper also proposes that consideration should be given to the introduction of a minimum wage and of statutory hours
of work for men. The latter, in particular, would appear to be essential if Hong Kong is to achieve labour standards at least
comparable to the best in the region.
FISCAL (paras 22-25 and Annex C paras 7-9)
1. We accept the need for Hong Kong to have flexibility in deciding on methods of taxation but it will, of course, be essential for taxation to be higher and more progressive in incidence.
2.
We are concerned at the general tenor of the Financial Secretary's speeches which do not encourage the necessary change in the general climate of opinion. In his recent budget speeches before the Legislative Council, for instance, the Financial Secretary referred to 20% of the GDP as being the limit, in his view, to public expenditure; to his expectation that this percentage will drop as the economy expands; to his intention to return to a balanced budget (at least) by 1978/79; and to the undesirability of using the fiscal system to pursue social justice. These views are inconsistent with the aims of the Planning Paper. In our view, it is necessary to prepare the tax-paying public for a change in these assumptions.
3. We were surprised that, contrary to our understanding, there was no general rise in direct taxation this year. There may be good reasons for this but we need to be kept more fully informed of budget strategy in advance so that we can comment as appropriate.
4. We were also surprised at the extent to which public expenditure was curbed during the recession last year, the oil crisis notwithstanding. We are glad to note reacceleration is under
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