XN000022-1978-01-24 — Page 2

TUESDAY, JANUARY 24, 1978

PUBLIC URGED TO COMMENT ON THE

SICKNESS, INJURY AND DEATH BENEFIT SCHEME

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THE DEPUTY DIRECTOR OF SOCIAL WELFARE, MR. JIMMY SWEETMAN, TODAY URGED MEMBERS OF THE PUBLIC TO COMMENT ON THE SOCIAL SECURITY DEVELOPMENT GREEN PAPER AND IN PARTICULAR THE SICKNESS, INJURY AND DEATH BENEFIT SCHEME.

SPEAKING AT THE LUNCHEON MEETING OF THE FEDERATION OF HONG KONG INDUSTRIES, MR. SWEETMAN SAID THAT THE PROPOSED SCHEME WAS A SEMI-VOLUNTARY CONTRIBUTORY ONE AND IT WOULD BE POINTLESS TO INTRODUCE IT IF IT WOULD ATTRACT ONLY LIMITED SUPPORT.

+ IT IS THEREFORE UP TO THE PUBLIC OF HONG KONG TO RESPOND AND GIVE THE IR VIEWS ON WHETHER THEY WANT PROGRESS TO CONTINUE ON NON-CONTRIBUTORY LINES, WITH BENEFITS PAID FROM GENERAL REVENUE, AFTER TAKING INTO CONSIDERATION THE ECONOMY'S ABILITY TO AFFORD THEM, OR WHETHER THEY WOULD WELCOME A MOVE TOWARDS CONTRIBUTING SOCIAL INSURANCE.+

EXPLAINING THE ADVANTAGES AND DISADVANTAGES OF THE CONTRIBUTORY SCHEME, MR. SWEETMAN SAID THAT SUCH A SCHEME WOULD FIT A SITUATION WHERE THE RATE OF BENEFITS WERE RELATED TO THE LEVEL OF INCOME EARNED AND CONTRIBUTIONS PAID BY THE BENEFICIARY AND TO THE LENGTH OF TIME HE HAD BEEN IN THE SCHEME.

+SUCH A SCHEME IS ALSO USEFUL IN ORDER TO SPREAD THE RISKS AMONG THE CONTRIBUTORS AND TO REWARD THOSE WHO HAVE BEEN PRUDENT ENOUGH TO JOIN IN WHILE LEAVING OUT IN THE COLD THOSE WHO DO NOT WISH TO JOIN ANY VOLUNTARY SCHEME OF SOCIAL INSURANCE.

+A CONTRIBUTORY SCHEME ALSO ENSURES THAT SUFFICIENT FUNDS ARE SET ASIDE AND INVESTED TODAY TO PROVIDE BENEFITS FOR TOMORROW.-

HOWEVER, HE ADDED, INFLATION COULD ERODE THE REAL VALUE OF THE MONEY COLLECTED AND INVESTED TO MEET FUTURE COMMITMENTS AND, A CONTRIBUTORY SCHEME ENTAILS PAYING HIGH OFFICE RENTS AND SALARIES TO THE PEOPLE WHO WOULD ADMINISTER IT.

MR. SWEETMAN ALSO POINTED OUT THE DIFFICULTIES IN THE INVEST- MENT OF THE CONTRIBUTORS' FUNDS AND SAID THAT THERE COULD BE ANOTHER MORE DIRECT WAY OF INVESTING IN OUR FUTURE AND DEVELOPING OUR ECONOMY TO ENABLE US EVENTUALLY TO AFFORD, OUT OF FUTURE TAXATION BASED ON A GREATER GROSS NATIONAL PRODUCT, SICKNESS BENEFITS AND RETIREMENT ALLOWANCES FOR OUR AGING WORK FORCE.

+WE WOULD THEREFORE CONTINUE TO PAY FOR OUR SOCIAL SECURITY OUT OF GENERAL REVENUE, GENERATED BY DIRECT DEVELOPMENT INVESTMENT- INDEED THIS IS THE WAY THAT HONG KONG ALREADY FINANCES MOST OF ITS DEVELOPMENT IN ALL FIELDS.+

/TUHNING TO .....