TNAG-0734-FCO40-938-Reports-of-Standing-Committee-on-the-Planning-Progress-of-Ho-1978 — Page 86

- 3-

Reference

1)

14.

The Multi-Fibre Arrangement

Although unconnected with the planning paper this was raised at the last meeting. A new bi-lateral agreement within the MFA has been signed between Hong Kong and the EEC. Reaction in Hong Kong has been surprisingly mild and, apart from the Norwegians, there is yet no sign that other countries will use it as an excuse for greater protectionism. It is generally agreed that the short term effects of the new year agreement are minimal but in the longer term the agreement will certainly prove restrictive, if world

trade improves.

m)

15.

Police and ICAC

Although it is now three months since the mutiny, disatisfaction in the Police Force is still evident. The newly formed Junior Police Officers Association (JPOA) is a possible focus of unrest since it is at present dominated by officers under anditement, indictment.

the new Committee to run the JPOA, due to be elected shortly, unst free of this element there is a good chance that the

Association will be able to act purely as a proper staff association.

16. The three-mant British team led by Jim Crane at present looking into the Police Force will, it is hoped, provide some ideas to improve its structure and the state of morale. The Governor has been asked to allow Jack Cater to visit the UK later this month and has recently received strong support from the Secretary of State for his tough line over the Yaumatei corruption case. It is hoped that both these actions will be taken as evidence of our continued support for the anti-corruption drive.

2 FUTURE OF SOCIAL PROGRESS IN HONG KONG

•

17

The forecast of revenue and expenditure for the next four years shows a small surplus for 1978/79, deficits in 1979/80 and 1980/81 and a significant surplus in 1981/82. The Governor has himself pointed to the year as the time when new measures can

Aleat be introduced. It is fair to say that it will only be then that the two schemes to which we have always attached particular importance, contributory social security and free and compulsory education up to the age of 15, would be in operation. I therefore suggest that we agree with the Governor that no major new area of expenditure can be introduced before 1981.

18. However, there are two areas in which we must continue to play an active role. The first is to maintain our efforts to achieve a more redistributive fiscal policy. Even if expenditure and revenue are not to expand there is scope for reducing the burden on the peer Sections of assistance and transferring it to those best able to afford it. The Special Economic Adviser is visiting Hong Kong in early April and I would suggest that this could well be the main area which he considers.

Cafudic Chanéto.

CODE 18.17