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the Government has housed 1.95 million of the population in subsidized public housing and introduced virtually free medical services. In the field of education it has introduced free universal primary education with plans rapidly to expand secondary education, to increase the number of technical institutes from 1 in 1973 to 5 in 1979 and to increase the full time places in higher education from 7,860 in 1974 to about 22,500
in 1980. The Police Force has been increased by over 30% since the beginning of 1973 and its organisation and relations with the public have been radically improved.
There has
also been notable progress in the Hong Kong Government's fight against corruption and crime. Finally in an overcrowded territory the Government has successfully carried out many bold and imaginative plans to improve c. mmunications, amenities and recreation facilities for the general public. Fuller details of these very extensive achievements and plans are given in Annex D. Taken together they should go a long way to discharge H.M.G.'s responsibilities to the population and meet U.K. criticism. What follows is an attempt to isolate such aspects of these plans about which we have doubts and to consider whether the fiscal and legislative arrangements of the Colony are adequate either to carry this through or U.K. criticism.
meet
Fiscal
4.
The most obvious distinction between Hong Kong and other industrial societies at a comparable level of development is the comparatively low and narrowly based level of direct taxation. (It is of interest that only 210,000 out of the total population pay salaries tax husbands and wives counting as one person and no taxes are levied on income arising from investments abroad.) To some degree it must be accepted that the present system has been conducive to growth;
C
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