CODE 18-77
$5 10/76
Reference
3).
CONFIDENTIAL
NOTE FOR THE FILE
1.
HKK 234 RECENLD IN MOS
16 JAN YO
Mr Stewart has minuted separately on the two major topics covered in his discussions on 3 January with Sir S Y Cheung. This is to record three other points
which were touched on.
(a)
Contributory Sickness, Injury and Death Benefit
Scheme
Sir S Y Cheung felt that a contribution of 2% was far too low and that this would have to be increased to provide the greater benefits, particularly a pension, of which he was very much in favour.
(b)
Taxation
Sir S Y could see no reason why the tax rate could not be raised to 171% or even 20%. He agreed that it was important to raise sufficient funds to achieve those objectives which are necessary rather than, as now, to work the other way round.
(c)
Diversification of Industry
Sir S Y has made it clear on the Government Committee, of which he is a member, that the essential objective must be to create employment rathen than wealth. To this end he favours manufacturing industry rather than the financial and services sectors, even if the former is less efficient and less profitable.
5 January 1977
Cc:
Mr Murray
Mr Hurst OLA
Mr Hull (Economists)
J Thompson
Hong Kong & General Department