TNAG-2013-FCO40-2865A-Constitutional-development-in-Hong-Kong-1991-1990 — Page 123

HONG KONG LEGISLATIVE COUNCIL

1 March 1990

香港立法局 一九九0年三月一日

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vociferous in their support for direct elections. That is understood. They no doubt anticipate support from the "grassroots". But they should not forget that the "grassroots" will want something tangible in return. Pressures will be on our liberal friends to "bring home the bacon". We can imagine the clamour for extra housing, education, social welfare, medical facilities and other social benefits.

If you operate in the name of the people they will want action. There is a price to pay. That price is normally met by the taxpayer. The outcome is often the welfare state with its gigantic costs. Just to cite the United Kingdom, the National Health Service costs HK$300 billion per annum, and absorbs a labour force which is four times that of the total British armed forces.

The welfare state also means more bureaucracy. In Britain, France and even the United States of America, there are about 80 civil servants for every 1 000 population. In Sweden, the home of the welfare state, the figure is an enormous 160 per 1 000. In all the states of Western Europe, the welfare state has assumed enormous proportions, consuming up to 60% of the national budget. Hong Kong is not a welfare state. Hong Kong does not want to become a welfare state. But no doubt direct elections will move us in that direction. Even at this stage our government is pressurized to spend more and more on housing, on education, on health, on road, on social services. The list is endless.

When over 50% of our Members are directly elected the Council will effectively be controlled by "spending" members, if I may call them that. Taxes will no longer be responsibly imposed, thus producing a high disincentive effect. The exodus of entrepreneurs and investors from Hong Kong will surely increase. Our prosperity will surely be jeopardized.

Freedom and enterprise

All around us we see the collapse of old-style socialist states and the march towards free markets and enterprise. The events of the past few months in Eastern Europe afford a fascinating insight into what happens when states and parties confiscate private property in the supposed interests of the "people".

Ultimately the "people" will reject those who deny them freedom. They have done so in East Germany, Rumania, Poland, Hungary, and now, even in the Soviet Union itself. The critical exception so far is, of course, China. I submit that Hong Kong's political freedom ultimately depends upon Hong Kong's economic freedom. But prior to achieving economic freedom is the

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