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CONFIDENTIAL
7
W
Financial Secretary and his personal disclaimer if Hong Kong hits
economic trouble. The current oil/energy crisis raises a
further question mark in this connection.
7. So far, reaction has been very muted. In the British press
no mention has been made of the confidence aspect. In Hong Kong
itself it has been accepted that tax changes are inevitable.
The "establishment" newspaper the South China Morning Post in an
editorial, describes the envisaged capital expenditure as
"daunting". But it continues by asking whether "in our grandiose
social plans we have not over-extended ourselves: but this belief
can only be sustained on the selfish and short-sighted assumption
that Hong Kong must remain a tax payer's paradise indefinitely".
Two leading Chinese language newspapers do not consider that
increased taxes will be an excessive burden on tax payers.
discount the increases as long expected although it is not clear
whether these comments refer to this year's tax increases or the
possibilities for next year. If the former, the latter have been
ignored. Business leaders have also welcomed the budget.
They
8. Future details, eg of estimated revenue, expenditure and tax
changes are given in the attached annex.
1310 March 1974
M A Goodfellow
Hong Kong & Indian Ocean Department
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Private notes are available after approval.