TNAG-2456-FCO40-3577-Future-of-Hong-Kong-constitutional-development-presentation-1992 — Page 110

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FM HONG KONG

TO DESKBY 07110OZ FCO TELNO 2459

OF 071015Z OCTOBER 92 INFO IMMEDIATE PEKING

INFO PRIORITY UKREP JLG HONG KONG

PERSONAL FOR RICKETTS, HKD.

PEKING:

FROM GOVERNOR

PERSONAL FOR AMBASSADOR

UKREP JLG: PERSONAL FOR GALSWORTHY

MY ADDRESS TO THE LEGISLATIVE COUNCIL: BRIEFING OF POLITICAL GROUPS.

THIS MORNING (7 OCTOBER) I BRIEFED IN CONFIDENCE THE SENIOR MEMBERS OF THE UDHK (MARTIN LEE), AND CRC CALLEN LEE), THE DEMOCRATIC ALLIANCE FOR THE BETTERMENT OF HONG KONG (MR.TSANG YUK-SHING AND MR.TAM YIU-CHUNG) AND MEETING POINT (MR.LI CHIK- YUET AND MR.FRED LI) ON THE MAIN POINTS THAT I WOULD BE MAKING IN MY ADDRESS TO THE LEGISLATIVE COUNCIL TODAY.

2. IN MY MEETING WITH DAB (HK), I SAID THAT I WAS IMPRESSED BY THE CONSTRUCTIVE POLICY PROPOSALS THAT SUCH A NEW ORGANISATION HAD PUT FORWARD. ON SOCIAL AND ECONOMIC ISSUES, I EXPECTED THAT THEY WOULD FIND MANY PROPOSALS IN MY SPEECH WITH WHICH THEY COULD AGREE. I EXPLAINED THAT AN UNEXPECTED WINDFALL SURPLUS OVER AND ABOVE THAT PREDICTED BY THE FINANCIAL SECRETARY IN HIS BUDGET SPEECH HAD ENABLED US TO CAPITALISE OUR EXPENDITURE TO ACHIEVE SOME LONGER TERM OBJECTIVES. WE WOULD BE INJECTING 2.3 BILLION DOLLARS INTO THE LOTTERIES FUND TO MEET THE MAIN TARGETS IN THE WHITE PAPER ON SOCIAL WELFARE AND THE REHABILITATION GREEN PAPER. THIS WOULD RELEASE SOME GENERAL REVENUE TO INCREASE PUBLIC ASSISTANCE PAYMENTS AND IMPROVE THE QUALITY OF EDUCATION. WE WOULD ALSO BE PUTTING SOME ADDITIONAL MONEY INTO THE RETRAINING FUND AND THE OPEN LEARNING INSTITUTE, AND WOULD PROVIDE AN INITIAL CAPITAL CONTRIBUTION OF 3 BILLION DOLLARS TO ENABLE OUR SEWAGE STRATEGY TO GET GOING FASTER AND CHARGES TO BE PAID BY THE PUBLIC TO BE HELD DOWN.

3.

I SAID THAT BECAUSE OF OUR FINANCIAL SITUATION,WE COULD DO A GREAT DEAL WITHOUT LOSING CONTROL OF PUBLIC EXPENDITURE. THERE WOULD STILL BE A LARGE SURPLUS IN 1997. THIS WAS NECESSARY

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