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account of the pattern over the past eight years or so. Government expenditure on social programmes has, of course, increased enormously: from HK$728 million at current prices in 1967/68 to an estimated HK$2,720 million in 1974/75. The proportion of social spending of the total budget has risen more slowly and erratically. It was 39.4% in 67/68, 32.9% in 72/73, 37% in 73/74, is 40% of the current budget. To a large extent these figures reflect the demands for expenditure on essential community services such as roads, water etc. without which Hong Kong would have ceased to be viable. However,
However, present 3 year budget forecast provides for the proportional social spending to rise to 48% in 79/80. But the indications would seem to be that the significant acceleration in social spending envisaged requires either a substantial growth in the economy or greatly increased Government resources from the existing economy, and probably both. The growing sophistication of Hong Kong industry and the needs of the population over the next decade require an increase, and improvement, in secondary and technical education and the extension of compulsion to secondary as well as primary education as places become available from 1978 onwards.
9.
Assuming the money is available, the obvious scope for expansion lies in the fields in which the Government is already doing much: housing, education and health, together with the administrative apparatus necessary to support the greater public expenditure required. In some sectors, e.g. education and health, nearly all of the cost would presumably be borne on current account; but in some fields changes in the system of financing could make a considerable contribution. The housing programme, for instance, has been remarkable by any standards but in our view the degree of subsidisation has been unnecessarily high and the rates of amortisation unnecessarily long: the rents of the old estates were as low as 6% of market levels. However, since December 1974, a new policy has been introduced of increasing rents with the ultimate
aim of achieving 50% of all seche
rents. The process must initially
be gradual for fear of provoking civil disturbances but it is
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