CONFIDENTIAL
taxation, although he must always remain sensitive to the need for competitiveness. Mr Rowlands observed that Victorian attitudes sometimes seemed to prevail in the Colony. The Governor did not feel that the analogy was appropriate: the Victorians did not provide housing, education or health on the scale that was being provided in Hong Kong. In his view, Hong Kong was perhaps 20 years behind the United Kingdom.
8. Mr Rowlands asked about Sir Murray's role as Governor. The Governor said that the prime job was to ensure that things got done and to muster support for necessary programmes. He did not feel that the Governor was sucked into the establishment: it was the Governor's role to take the lead. It was part of his job to identify possible sources of opposition, but in general he was very pleased with the support which he obtained from the Administration. Opposition to reform in Hong Kong often originated from the mass of small manufacturers backed by the Communists. In general big business was helpful to him. It was the Poujadist element which was unhelpful; he did not think that this had always been sufficiently appreciated in London. He re-emphasised that the Hong Kong Government would obtain the necessary money from taxation although he did not feel that the imposition of high rates was ever going to be realistic; in his view rates could go up to say 20%, but he wanted to be sure that the Hong Kong Government would have the capacity to spend the additional revenue..
Distribution:
HKD
OLA
Economists Dept
Mr Male
Mr Cortazzi
Mr Lamour
PS/Lord Goronwy-Roberts PS/Mr Howlands
The Governor, Hong Kong
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