CONFIDENTIAL
14.
Is it possible to give some idea of the scale of assistance that could be provided in the social welfare field with HK$2,100 million?
DSR 11C
It would be better to regard only the HK$1,800 million (at 1976 prices)
on the General Revenue Account as being available for welfare purposes.
The remaining HK$300 million would be for other social projects falling
within the sphere of responsibility of the Housing Authority and the
Urban Council (and which would be financed other than through the General Account). Of this HK$1800 million, some HK$1260 million would arise in 1979/80 (question 6) which will be taken as the first year in which any
new scheme for social welfare would be in full operation. From this, it
would be necessary to deduct the collection costs for the luxuries' tax, estimated at HK$70 million (question 11). It would also be necessary to assume that a proportion of the HK$1260 million (say 40% or about HK$ 500 million) would be absorbed by administrative costs (mostly recur-
rent, it being assumed that office accommodation would already be adequate
in the headquarters and branches of the Social Welfare Department, the Home Affairs Department and the New Territories Administration). Thus, some HK$690 million would be available for distribution. (In practice
there could be rather more since a new publicly-administered scheme might
mean that there could be a reduction in subventions.to private organisa- tions). The precise nature of the scheme to be introduced is very much a
matter for judgment and clearly the field is wide open. Purely by way of illustrating the magnitudes involved, it might be possible in 1979/80 to
provide some form of income supplementation equivalent to around HK$9-10 a day at 1976 prices to all persons aged 65 or over, at a cost to public
funds of about HK$610 million:
Average daily wage for industrial workers, excluding fringe benefits,
in September 1975 HK$24.15 (say HK$24).
conceivable
Assume of this figure a likely rate of old age supplementation/now
at 1976 prices (of HK$24 HK$ 8).
Assume supplementation awarded on basis of 5 days a week for 50 weeks
a year.
HKX 2000
=
250,000 (population mid-1975
Thus annual supplementation per person = HK 8x5x50 Assume population aged 65 + in 1979/80
= 238,000)
Hence cost to public funds in 1979/80 at 1976 prices at 1976/77 rate of supplementation = HK$2000 x 250,000 HK$500 million. Gross domestic product 1976/77 at 1976 prices = HK$39317 million.
*
as per question 2
CONFIDENTIAL
/ Gross
Gross domestic