XN000022-1977-06-01 — Page 7

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WEDNESDAY, JUNE 1, 1977

HE NOTED THAT THE FEDERATION OF HONG KONG INDUSTRIES HAD WRITTEN TO THE COMMISSIONER FOR LABOUR ON JANUARY 26 AND AGAIN ON MARCH 16 WHEN IT EXPRESSED THE STRONG FEELING THAT THE FINANCIAL BURDEN ON THEM, WHEN CALCULATED ON AVERAGE FUTURE EARNINGS OF WORKERS AND TAKING INFLATIONARY ELEMENTS INTO ACCOUNT, +WOULD SERIOUSLY AFFECT THE CONTINUED VIABILITY AND FUTURE DEVELOP- MENT OF INDUSTRY BECAUSE OF A SUDDEN INCREASE OF CONTINGENT LIABILITY.+

MR. WU SAID IT WAS WELL-KNOWN THAT GENERALLY WORKERS IN HONG KONG CHOOSE TO HAVE A LARGER TAKE-HOME PAY IN PREFERENCE TO ANY DEFERRED BENEFITS.

+WITH SEVERANCE PAY NOW BECOMING INCREASINGLY A FACTOR, IT IS APPARENT THAT ALLOWANCE WOULD HAVE TO BE MADE FOR THIS FUTURE BENEFIT TO WORKERS AT THE COST OF PAY INCREASES.

+AFTERALL, WITH OUR PRESENT WAGES NOW 80 PER CENT HIGHER THAN TAIWAN AND MORE THAN DOUBLE THAT OF SOUTH KOREA, AND WITH A FAST NARROWING GAP IN OUR TRADITIONALLY STRONG INDUSTRIES BUT WITH A MUCH SMALLER INDUSTRIAL BASE, HOME MARKET AND LABOUR SOURCE, THERE IS A LIMIT TO WHAT WE CAN DO IN MORE SOPHISTICATION AND DIVERSIFICATION WITH WHICH TO RAISE WAGES WITHOUT PRICING OURSELVES OUT OF THE MARKET, HE SAID.

+WE ONLY HOPE THAT THOSE IN POWER, AND THOSE SAID TO BE CONCERNED, WOULD JUST LEND THEIR EARS AND STUDY MARKET CONDITIONS AND THE LONG TERM EFFECTS OF PROPOSED LABOUR LEGISLATIONS INSTEAD OF BASING THEIR JUDGEMENT ON PREJUDICE OR OUT-DATED INFORMATION, HE ADDED.

THE HON. T.S. LO VOTED AGAINST THE BILL +TO UNDERLINE THE SERIOUSNESS OF THE PRINCIPLE INVOLVED.+

HE SAID IT WAS WRONG IN PRINCIPLE TO SUDDENLY IMPOSE SUCH AN UNEXPECTED BURDEN ON EMPLOYERS WHO HAVE MADE NO PROVISION FOR SUCH SEVERANCE PAY.

+ IN PRINCIPLE, THIS IS NO DIFFERENT FROM GOVERNMENT INTRODUCING A NEW FISCAL MEASURE TO INCREASE PROFITS TAX OR SALARIES TAX BY A FEW PER CENT AND BACKDATING IT FOR, SAY, TWELVE YEARS,+ HE SAID.

HE CONTINUED: THE MISCHIEF OF A GOVERNMENT PRONE TO PUT THROUGH LEGISLATION WITH A RETROSPECTIVE ELEMENT IS THAT IT INDUCES A SENSE OF UNCERTAINTY IN THE MINDS OF THOSE WHO WORK AND LIVE. WITHIN ITS JURISDICTION AND THAT IT MAKES A MOCKERY OF PROPER PLANNING.

+ACCORDINGLY, AND IN VIEW OF THE GOVERNMENT'S MAJORITY IN THIS COUNCIL, I CONSIDER IT APPROPRIATE FOR GOVERNMENT TO DISCLOSE THE PRINCIPLES IN ACCORDANCE WITH WHICH IT WILL IN FUTURE INTRODUCE LEGISLATION CONTAINING A RETROSPECTIVE ELEMENT. +

MR. LO SAID HE CONSIDERED THE SEVERANCE PAY LEGISLATION +A CLEAR EXAMPLE OF EMOTIVE LEGISLATION.+

/IT HAS