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We have also pursued over the years sensible economic policies. We have now had 35 years of uninterrupted economic growth. It might actually be more than 35 but we only started collecting the figures 35 years ago, so we are pretty modest about it.
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Public spending has been kept under control. We distinguish, which seems to me to be pretty sensible, between capital and current spending, and we ensure that current spending is not allowed to rise year on year by more than the trend rate of growth in the economy as a whole. That means that all government expenditure, public expenditure defined as its widest, represents about 18.5 per cent yes, you heard that right, 18.5 per cent of GDP. When I leave in 1997, public spending will be lower as a proportion of GDP than it was in the early 1980s, and that is despite a substantial programme of improvement in housing, in welfare, in healthcare, in education over the last few years. We have actually increased our expenditure on the elderly by 50 per cent in real terms over the last three years, our expenditure on social welfare by almost the same, our expenditure on education and research by comparable amounts, but because of our economic growth, we have managed to ensure that public spending does not take a larger and larger proportion of our overall income.
We have also managed to ensure that we can go on cutting taxes. As I think. you will know, the top rate of tax in Hong Kong is 15 per cent on salaries and that is paid by 2 per cent of the working population. Sometimes I am told that we should introduce tax breaks in Hong Kong. People only introduce tax breaks in communities where, once you start paying tax, you pay at rather higher levels than we impose in Hong Kong.
We have one of the most open economies in the world, it is true, which people sometimes criticise for; that there is now rather more regulation in financial markets; that we are concerned about quality controls, so that we can know that "Made in Hong Kong" represents a quality product. We are also much tougher than we were on health and safety regulations in industry, particularly in the construction industry, where our figures are still appallingly bad. All that said, the Heritage Foundation has still awarded us the prize as the freest economy in the world, and I intend that things should stay that way.
So Hong Kong represents, both in terms of economic and in terms of social progress, an astonishing success story. Will it change in 1997? It should not change. There are guarantees that it will not change, and of course the story of Hong Kong's success has produced its own momentum ..... it has the commitment of the people of Hong Kong behind the values which have helped to create this economic success story.
However, people sometimes ask are not Hong Kongers already voting with their feet? Well, hardly. The major social issue that we face at the moment is unemployment. Unemployment has climbed and you may regard it as surprising and