success. Singapore is an authoritarian centrally-managed society; Hong Kong permits a much greater degree of individual and corporate freedom. The Foundation is not in favour of the Government seeking itself to
The Government does manage the savings of workers and their employers. not have the skills to manage such funds or to respond to the varying needs of different firms and different groups of workers.
The Foundation would prefer any provident fund schemes established to be managed by the private sector. It is not necessary to create a central
Private sector provident fund to ensure that all workers are covered. provident fund schemes can simply be made compulsory, as the Government has said it will do.
o Potential political problems
Unlike Singapore or Malaysia, Hong Kong is not a sovereign state. creation of a large central pool of funds under the control of the Hong
It Kong Government could give rise to political problems in the future. is better that the collective savings of the workforce remain managed by independent private sector firms.
The
(5) Proposal for an old age pension
Neither a central provident fund nor private sector provident funds address the urgent need of Hong Kong society now: the plight of those who are now old. Only a universal old age pension will enable our elderly citizens to live a life of moderate dignity.
In making the following proposals the Foundation acknowledges the help of the Hong Kong Social Security Society.
The Foundation's proposal is that an old age pension of approximately 35% of the average wage, or HK$1,800, should be paid to all Hong Kong citizens over 65. Those between the ages of 60 and 65 could live off any long-service or provident fund payments available to them, or continue to work. Given the 483,000 over-65s in the territory, the Foundation's proposal would cost approximately HK$10.4 billion at 1991 population and wage levels.
How could this be paid for? Employees and employers would each make equal contributions of 2% of salary. The Government would contribute the monies it currently spends on the Old Age Allowance and Public Assistance for the elderly. There would be some further net savings from the reduction in Social Welfare Department manpower currently engaged in means testing. No calls on general Government revenue would
be necessary.
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