TNAG-0761-FCO40-965-Budget-of-Hong-Kong--1978-1979-1978 — Page 107

SECRET

HEALTH SERVICES, AND THE POLICE, NOT TO SPEAK OF THE PUBLIC WORKS PROGRAMME AND THE STEADY BUILD-UP OF MANY OLD AND NEW BRANCHES OF THE PUBLIC SERVICE, BUT ALSO THE NEW SOCIAL WELFARE PROGRAMMES, INCREASED RATES OF PUBLIC ASSISTANCE, FREE JUNIOR SECONDARY EDUCATION AND MUCH ELSE BESIDES (SOME OF WHICH IS LISTED IN PHILIP'S NOTE). THE RESULT WILL BE A 26 PERCENT INCREASE IN EXPENDITURE ON 1977/78. THE FIGURES ARE (WITH PERCENTAGE CHANGES ON 77/78 IN BRACKETS):~

REVENUE.

RECURRENT

8,770 (+ 11)

CAPITAL

1,160 (-3)

9,930 (+9)

EXPENDITURE.

RECURRENT

7,330 (+18)

CAPITAL

2,920 (+54)

10,250 (+26)

320

OVERALL DEFICIT

5. THE REVENUE FIGURES ABOVE ARE PROJECTIONS AT CURRENT RATES. CHANGES ENVISAGED ARE:-

A) PROBABLY SOME CHANGES IN POSTAL FEES AND WATER CHARGES BOTH OF WHICH ARE IN DEFICIT.

B) EXCISE SOME MINOR CHANGES TO PREVENT EVASION OF DUTIES ON TOBACO AND DIESEL.

C) PRIVATE CAR REGISTRATION FEES. AMENDMENTS TO HIT LUXURY CLASS HARDER.

D) ABOLITION OF STAMP DUTY ON WIDE RANGE OF DOCUMENTS (IN LINE BROADLY WITH UK PRACTICE) AT COST OF DOLLARS 120 MILLION.

E) MAKE IT UP (WITH MORE ROUGH JUSTICE THAN LOGIC) BY INCREASING CORPORATION PROFITS TAX TO 17 AND ONE HALF PERCENT.

2

SECRET

16. WE ARE