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WANTS YOUR VIEWS WITHOUT THESE BEING COLOURED BY OR TIED TO IDEAS CURRENT IN THE OFFICE. IN VIEW OF THIS WE ARE NOT SENDING YOU THE DRAFT PLANNING PAPER IN ITS PRESENT STATE BUT IT MAY HELP NO FOCUS YOUR PAPER IF I SUMMARISE THE GENERAL THRUST OF THE SECTION DEALING WITH FUTURE INTERNAL POLICIES.
5. THE MAIN CONCLUSION IS THAT DEVELOPMENT OF POLICIES IN THE FISCAL SOCIAL AND LABOUR FIELDS CAN ONLY BE SUCCESSFUL WITH THE ACTIVE SUPPORT OF YOUR OFFICIALS AND TH THE CONSENT OF EXCO AND LEGCO. PARLIAMENT WILL, HOWEVER, NEED TO DE CONVINCED THAT THE ADVICE OF UNOFFICIALS IS GENUINELY REPRESENTATIVE OF HONG KONG OPINION. THE KEY, THEREFORE, IS THE DEVELOPMENT OF INSTITUTIONAL CHANGE ALONG THE LINES RECOMMENDED IN YOUR DESPATCH
OF 20 MAY 1974: BUT THERE MAY BE SOME SCOPE FOR SEPARATING MORE CLEARLY THE FUNCTIONS OF EXCO AND LEGCO TO ALLOW THE LATTER TO DECOME A MORE OPEN FORUM FOR DEBATE. VIEWED FROM HERE, FISCAL REFORM IS THE NEXT PRIORITY (PARTICULARLY THE INTRODUCTION OF AN INCOMES TAX HIGHER, MORE BROADLY BASED AND PROGRESSIVE THAN PRESENT DIRECT TAXATION) AND A DIFFERENT APPROACH TO THE FINANCING OF CAPITAL EXPENDITURE, GREATER RESOURCES SHOULD ENABLE ACCELERATION OF SOCIAL SPENDING ON HOUSING, EDUCATION AND HEALTH, IT WOULD ALSO SEEM DESIRABLE TO BRING LABOUR STANDARDS AND SOCIAL SECURITY PROVISIONS AT LEAST UP TO THE BEST OFFERED IN HONG KONG'S ASIAN NEIGHBOURS AND COMPETITORS. PROSPECTS FOR TRADE UNION DEVELOPMENT WILL NEED TO BE ASSESSED IN THE LIGHT OF THE RESULTS OF THE LOW PROFILE STUDY.
5
FINALLY THE PAPER CONSIDERS THE HONG KONG/BRITISH RELATIONSHIP AND THE NEED FOR BOTH SIDES ADEQUATELY TO UNDERSTAND EACH OTHER'S DIFFICULTIES. IT WILL BE ESPECIALLY IMPORTANT TO CONTINUE THE GOOD WORK YOUHAVE BEEN UNDERTAKING TO PROMOTE A MORE PRO-BRITISH ATMOS- PHERE IN THE COLONY, THE DEPARTMENT HERE WILL NEED STRENGTHENING AS WILL THE ADMINISTRATIVE STRUCTURE IN HONG KONG,
7. WHILE NOT WISHING TO LIMIT YOUR OWN CONSIDERATION OF WHAT MIGHT BE DONE INTERNALLY IN HONG KONG OVER THE DECADE, IT WOULD BE HELPFUL IF YOU COULD DEVOTE SOME SPACE TO THE ABOVE POINTS
CALLAGHAN
FILES HE/HIOD
MR CORTAZZI
KO/FED
MR LARMOUR
OLA PS/PUS
MR MALE
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COPIES TO
MR MASEFIELD PLANNING STAFF MR DARE ECONOMISTS D
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