TNAG-0310-FCO40-346-Contributions-of-Hong-Kong-for-costs-of-maintaining-military-1971 — Page 70

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Members again that the agreement with Her Majesty's Government provides for a review of the contribution if the rate of growth of our economy should suffer such a serious adverse change that continued payment of a contribution at this level constitutes an unreasonable

burden.

To sum up, Sir, over the five years 1971-72 to 1975-76 Hong Kong is to make a contribution amounting in kind and in cash to £40 million, bearing in mind that

(a) this sum represents only about one third of the

recurrent cost of the garrison to the United Kingdom taxpayer leaving aside capital works;

(b) it is no more and probably less than the direct

economic benefit to Hong Kong of Services spending;

(c) costs here, as elsewhere, have risen sharply

since the previous agreement was negotiated, and thus our contribution will probably be a smaller proportion of the total cost than we contributed under the last agreement;

(a) the annual figure of £8 million a year is a

somewhat smaller proportion of our annual revenue than the old one;

(e) no less than £28 million of the total contribution

of £40 million will be spent in Hong Kong on capital works in which we shall have a continuing

interest;

(f) we shall recover valuable land in the urban area and in the New Territories which will be of both

financial and social benefit to Hong Kong.

The supplementary provision of $34,908,100 which the Finance Committee of this Council has approved, represents only the difference between the first cash contribution of £2.4 million and the token sum of $1,000 provided under Head 36 Defence: Miscellaneous Measures, Subhead 1 Defence Contribution, compared with $57.1 million in each of the four years 1967-68 to 1970-71. Total expenditure in 1971-72 is likely to be in the order of $109 million, but this. will depend on the capacity of the Public Works Department to get the capital

works programme under way.

Sir, I beg to move.