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Mr J A B Stewart (HKD)
B Stewart
BU W Duffy 17/2-1
CC: Mr Michael Stewart (Special Economic Adviser)
HONG KONG BUDGET 1976/77
1.
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Mr Michael Stewart asked me to pass the following comments to you as he could not meet you late last night. He can be obtained from 1100/1300 today at his office at University College London (his PA has his telephone number). Perhaps you could
call him.
2.
Firstly, he thinks it well worth emphasising that there is no indication of any economic strategy in the Budget outline. The low public expenditure/GDP ratio also causes him concern.
3.
Secondly, on the suppression of the effect of revised rateable values, he would not regard such a move as inegalitarian, but would question the original decision to revise the values across the board. He could see a case on egalitarian grounds for giving greater relief to the smaller property owners.
4.
Thirdly, on the improvements in personal allowances, he does not see the proposals as inequitable, but as providing greater relief in absolute terms, which is not necessarily so in relative terms, to the higher income groups.
5.
Finally, the raising of the estate duty exemptions looked excessive in terms of taking into account past inflation and appears solely directed towards the higher income groups.
SODE 18-}{
15 February 1977
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Adrian Smith
Senior Economic Adviser G 72/G
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