SECRET
the Government has housed 1.95 million of the population in
subsidized public housing and introduced virtually free
medical services. In the field of education it has introduced
free universal primary education with plans rapidly to
expand secondary education, to increase the number of technical
institutes from 1 in 1973 to 5 in 1979 and to increase the full time
places in higher education from 7,860 in 1974 to about 22,500
in 1980. The Police Force has been increased by over 30%
since the beginning of 1973 and its organisation and relations
with the public have been radically improved.
There has
also been notable progress in the Hong Kong Government's
fight against corruption and crime. Finally in an overcrowded
territory the Government has successfully carried out many
bold and imaginative plans to improve communications, amenities
and recreation facilities for the general public. Fuller
details of these very extensive achievements and plans are given
in Annex D. Taken together they should go a long way to
discharge H.M.G.'s responsibilities to the population and meet
U.K. criticism. What follows is an attempt to isolate such aspects of these plans about which we have doubts and to
consider whether the fiscal and legislative arrangements of
the Colony are adequate either to carry this through or meet
U.K.
criticism.
Fiscal
4.
The most obvious distinction between Hong Kong and
other industrial societies at a comparable level of development
is the comparatively low and narrowly based level of direct
taxation. (It is of interest that only 210,000 out of the
total population pay salaries tax - husbands and wives
counting as one person - and no taxes are levied on income
arising from investments abroad.) To some degree it must be
accepted that the present system has been conducive to growth;
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