Page
:
12.
The Governor said that the continuing
competitiveness of Hong Kong was an ever-present concern. This was why infrastructural development was so important, if we were not to fall behind what others were doing. Education was also relevant. On inflation, he did not believe that we could change the Hong Kong Dollar link. Stability was vital, and any change would lead to further speculation. He recognised that this meant that we could not make full use of monetary policy to control inflation. So we had to look at other issues, including
We could not afford housing costs and the labour supply.
to let public expenditure get out of control.
13.
The
Mr. Lau Wah-sum said that there had been considerable wage increases over the past few years. Hong Kong Government chose to base its increases on the private sector, but the private sector blamed Government for the inflationary spiral. He wondered if the Government and the private sector should not agree on a
The Governor wage policy that would fight inflation.
said that this had been raised with him by many businessmen.
14.
Mrs
It was important to The Governor agreed.
He
On social issues, Mr. Gilbert Leung said that the CRC was concerned about the housing problems of the sandwich class, which they defined as families earning between $18-30,000 a month: 34,000 families fell into this category. The Government should seek additional land from the Land Commission. The Governor said that he thought we could be more imaginative about ways of encouraging home ownership, for example staircasing. This was an area that he would like to look into. Selina Chow said that we had to be careful not to enlarge the public sector indefinitely. increase private participation. asked why sales of public sector flats had not been more successful. Mrs Chow said that this was largely a matter of pricing.
Rents in public housing were very subsidised. People who bought flats had to pay for mortgages and then a management fee on top of this. Gilbert Leung said that the sale price was pegged to market value. The Governor said that he would find it interesting to read CRC's position paper on this subject.
Professor Felice Lieh-mak said that she was concerned about the possibility of civil unrest in Hong Kong if the economy declined or if there was political
The Governor conflict as the 1995 elections approached. said that he had been very impressed by what he had seen on his visit to the Police in the previous week. hoped that we could avoid the reasons for civil unrest. The underlying economic strength of Hong Kong was sometimes under-estimated.
15.
He
Mr.
CONFIDENTIAL
No comments yet.
Private notes are available after approval.