GR 700
IMMEDIATE
CYPHER/CAT A
FM HONG KONG 121014Z
CONFIDENTIAL
CONFIDENTIAL
PROVO IN
REGISTRY NO. 51.
15 AUG 1977
~1/2013/2
TO IMMEDIATE F.C.O TELNO.820 OF 12 AUGUST.
YOUR TELNO.623: SOCIAL WELFARE REVIEW.
TOP COPY
kur.
Ece (37).
(29)
1. THE PROPOSALS HAVE BEEN PREPARED FOLLOWING WIDE INFORMAL CONSULTATIONS, AND ARE DESIGNED TO PRODUCE THE MAXIMUM SUPPORT FROM THE PEOPLE OF HONG KONG. TO THIS END, WE HAVE CONCENTRATED ON PROVIDING ADDITIONAL AID FOR THOSE INCAPABLE OF SELF SUPPORT (BECAUSE OF OLD AGE, SICKNESS OR OTHER INCAPACITY) AND FOR THOSE WITH LOW INCOMES. THE UNEMPLOYED HAVE NOT BEEN SINGLED OUT FOR SPECIAL TREATMENT BUT WILL BENEFIT FROM THE VARIOUS IMPROVEMENTS
IN PUBLIC ASSISTANCE.
TN
33
2. THE PROPOSED CONTRIBUTORY SCHEME BREAKS ENTIRELY NEW GROUND IN HONG KONG. WE HAVE NOT THEREFORE ATTEMPTED TO MAKE IT COMPREHENSIVE AT THIS STAGE. IF IT IS SUCCESSFUL, HOWEVER, AND THERE IS PUBLIC SUPPORT FOR ITS EXTENSION, THERE IS NO ADMINISTRATIVE REASON WHY IT MIGHT NOT BE EXTENDED TO COVER UNEMPLOYMENT. TO START WITH UNEMPLOYMENT, HOWEVER, WOULD IN OUR JUDGEMENT JEOPARDISE PUBLIC ACCEPTANCE OF THE SCHEME. IT WOULD ALSO BE A MORE COMPLEX ADMINISTRATIVE EXERCISE: AND COULD WELL HOLD UP THE SCHEME'S INTRODUCTION. THE ADVICE OF THE PREVIOUS
F.C.O OVERSEAS LABOUR ADVISER (LETTER OF 11 SEPTEMBER 1975) SUPPORTS THIS CONCLUSION: AND SO DOES THAT OF THE REGIONAL ILO
ADVISER.
3. THE CONTRIBUTORY SCHEME COULD ALSO BE EXTENDED AT A LATER STAGE,
IF IT WAS THOUGHT DESIRABLE, TO PROVIDE MORE SUBSTANTIAL RETIREMENT BENEFITS. BUT AS WITH UNEMPLOYMENT WE DO NOT WANT TO OVERLOAD THE SCHEME AT THE START. THAT IS WHY THE PROJECTED CONTRIBUTION RATE IS LOW. MOREOVER, OUR OTHER PROPOSALS WILL PROVIDE CONSIDERABLE EXTRA IMMEDIATE FINANCIAL SUPPORT FOR THE ELDERLY, WHEREAS A CONTRIBUTORY SCHEME WOULD TAKE MUCH LONGER TO PROVIDE AN ADEQUATE LEVEL OF BENEFIT. (WE CAN PROVIDE IMMEDIATE SICKNESS AND DEATH COVER ON AN INSURANCE BASIS, BUT THIS APPROACH
CONFIDENTIAL
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