TNAG-0228-FCO40-264-Briefs-for-Governor-of-Hong-Kong-1970 — Page 22

A.

CONFIDENTIAL

Hong Kong: Some basic questions that might

be asked.

(

Financial & Economic

1. Budget: is it sensible to go on lumping capital receipts

· and expenditure in with current revenue and expenditure?

2. Is it sensible to go on assuming that loans by the Government

cannot or should not be raised either in Hong Kong or

externally?

3. What kind of increase of taxation might be envisaged without

risk to Hong Kong's prosperity?

4. Is there any economic need for further increases of Hong Kong's

external assets (i.e. sterling)?

5. Do the answers to questions 1-4 indicate that the only

restraints upon the Hong Kong Government's expenditure on

internal needs are either policy ones or physical ones (e.g.

lack of trained engineers or of land) but not financial ones?

6. What rate of increase of expenditure can be realistically

planned then over the next 5 and 10 years for those sectors of

the Government's activity where present facilities are

obviously poor, in particular:-

(a) education

(b) housing

(c) social security?

7. Would an outside survey, e.g. by the IMF or World Bank, help to

focus ideas?

8. How long can Hong Kong manage without a Central Bank?

CONFIDENTIAL

/9.