TNAG-0537-FCO40-632-Strength-of-garrison-in-Hong-Kong-1975 — Page 161

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UK EYES A

This

contribution would be held to imply complete abandonment by the UK of

her duty). Conversely the higher the proportion of the cost paid by

Hong Kong, the greater the 'say' the 'unofficials' would clain in

determining the size and character of the garrison and the standards to

which it should be maintained. Any proportion greater than one half

would be regarded by them as giving Hong Kong a majority interest.

is a position which the Governor for his part would not wish to arise.

(e) The presence of British forces was regarded as of economic value

(costs going into the Hong Kong economy average about £27M a year at

the September 1974 prices) and as contributing to economic stability:

presence of UK (as opposed to Gurkha) teeth arm units was described by

some as of particular significance in this respect.

(f) On the other hand, it was felt by some 'unofficials' that the

garrison is too large, or at least maintained at too high a standard,

16. Hong Kong Budgetary Position

The main features of Hong Kong's budgetary position were described as follows

by the Financial Secretary:-

(a) Substantial budget deficits are forecast for 1975/76 and for the

three years 1976/77-1978/79, which are treated as "forecast years" in

Hong Kong's budgetary planning (and would also be the first three years

to be covered by the next defence contribution agreement). These fore-

casts assumed a Hong Kong defence contribution of Hong Kong $205M or

£17M, and the size of the deficits would be further significantly

increased if the Hong Kong defence contribution were raised from this

planning figure to the equivalent of 75% of the estimated cost of the

reduced garrison. Removing the deficits would require a combination of

expenditure cuts and rephasing, tax increases and higher borrowing.

9

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