TNAG-0568-FCO40-701-Planning-paper-on-Hong-Kong-1976 — Page 92

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due to the recession. It is for consideration whether a

greater resort to domestic and foreign borrowing should not

become a normal feature of the fiscal system.

6. Hong Kong's present philosophy has also precluded the use of other tools of fiscal and monetary management (eg control of the money supply) which have become increasingly important since the detachment of the Hong Kong dollar from sterling in 1972. This has been in part attributed to unwilling- ness to set up a central monetary authority; and there has been considerable official concern in the UK over possible

conflict of interest between the Hong Kong and Shanghai Banking

Corporation's commercial activities and its role as the Govern-

ment's banker. The basic philosophy has also inhibited the Government from requiring comprehensive financial (and industrial) statistics.

7.

And finally it is for consideration whether too great

attachment to Hong Kong's free port status has not imposed unnecessary limitations on the revenue obtainable from

indirect taxation.

Social

8. The Government's current social programme is concentrated

in four main areas:

(a) a ten-year housing plan designed to provide additional housing for another 1.6 million people;

(b) a five-year plan for the development of existing social welfare services (eg a means-tested public assist- ance scheme, non-contributory allowances to "vulnerable groups" and emergency relief) to include improved community services for deprived groups eg the disabled;

(c) an education plan to provide by 1979 education

up to the age of 14 for all children in Hong Kong and five years secondary schooling up to 16 for 40% of the

children;

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/(a)