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ways in which progress could be made. The first is to build on the present scheme whose administration is now well established, is working well, and is technically capable of considerable modification or expansion. By such means a complete system of social security based on need, however defined, could be established. Secondly, a new system based on compulsory contributions by employers and employees could be substituted within the form of a Provident Fund or along UK lines, The objections to either of the
latter concepts is that with the uncertain future of Hong Kong the population would resent deductions from their disposable income now in return for a promise of financial security at a later date. A third possibility is to introduce a contributory element to cover some of the more immediate benefits, e.g. unemployment benefit and of conferring non-contributory entitlements to a wider range than at present, e.g. widows' pensions. The problem is however one of some complexity and the whole matter needs to be looked at in some detail.
13. Another promising field for increased public expenditure is housing. The housing programme has been remarkable by any standards but whilst the quality has been rising it still falls well below that provided in Singapore. To some extent this has been due to the need rapidly to house very large numbers of people within certain financial constraints: the degree of subsidisation has been high (rents being as low as 6% of private sector levels on the older estates) and the rates of amortisation long. However, since December 1974, a new policy has been introduced of increasing rents with the ultimate aim of achieving 50% of private sector rents. The process must initially be gradual for fear of provoking civil disturbances but steady progress should be made in releasing further resources by raising both domestic and commercial rents to realistic levels (use can be made of the existing machinery to ensure that where the means of individual tenants are not equal to increased rents, special assistance should be provided). Borrowing could make a contribution and the Hong Kong Government is at present negotiating a loan of approximately HK$ 300 million from the Asian Development Bank for this purpose. Additionally a scheme is shortly to be introduced to encourage better off tenants to buy new flats through a home purchase scheme, thus releasing
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