XN000022-1981-07-30 — Page 13

THURSDAY, JULY 30, 1981

12

PENSIONS ADJUSTED TO MEET COSTS

***

A PROPOSAL BY THE GOVERNMENT TO INCREASE PENSION PAYMENTS FOR ITS STAFF IN ORDER TO MAINTAIN THE ORIGINAL PURCHASING POWER OF THE PENSIONS WAS TODAY APPROVED BY THE LEGISLATIVE COUNCIL.

THE ACTING SECRETARY FOR THE CIVIL SERVICE, THE HON H.S. GREWAL, IN MOVING THE PENSIONS INCREASE) ORDINANCE (CAP. 305) AND THE WIDOW AND ORPHANS PENSIONS (INCREASE) ORDINANCE (CAP. 205), SAID IT WAS THE GOVERNMENT'S POLICY TO MAKE THE ADJUSTMENTS TO REFLECT CHANGES IN THE COST OF LIVING.

DURING THE REVIEW PERIOD FROM JULY 1, 1980 TO JUNE 30, 1981, HE SAID, THE MOVING ANNUAL AVERAGE OF THE CONSUMER PRICE INDEX (A) ROSÉ BY 21.5 POINTS OR 14.30 PER CENT.

+ IN THE LIGHT OF THIS MOVEMENT, IT IS PROPOSED THAT PENSIONS IN PAYMENT ON JULY 1, 1981, INCLUDING PREVIOUS INCREASES ALREADY APPROVED, SHOULD BE INCREASED BY 14 PER CENT WITH EFFECT FROM OCTOBER 1, 1981.+

MR GREWAL SAID THE COST OF THE INCREASE WAS ESTIMATED TO BE $20.3 MILLION FOR THE REMAINDER OF THE CURRENT FINANCIAL YEAR AND $40.6 MILLION IN A FULL YEAR.

HE ALSO SAID THAT THE GOVERNMENT HAD DECIDED, ON THE ADVICE OF THE EXECUTIVE COUNCIL, THAT WITH EFFECT FROM APRIL 1, 1982, THE REVIEW PERIOD AND THE EFFECTIVE DATE OF ANY AWARD OF PENSION INCREASES SHOULD BE THE SAME AS FOR SALARY ADJUSTMENTS, ALTHOUGH REVIEWS OF PENSIONS AND SALARIES WOULD CONTINUE TO BE CONDUCTED SEPARATELY BECAUSE OF THE DIFFERENT FACTORS INVOLVED.

INTEREST ON TAX RESERVE CERTIFICATES

***

THE FINANCIAL SECRETARY HAS AUTHORISED AN INCREASE IN THE RATE OF INTEREST PAYABLE ON TAX RESERVE CERTIFICATES. AS FROM JULY 31, 1981, THE NEW ANNUAL RATE OF INTEREST WILL BE 13.2 PER CENT (TAX FREE) AS AGAINST THE CURRENT RATE OF 9.84 PER CENT (TAX FREE).

INTEREST ON TAX RESERVE CERTIFICATES IS CALCULATED IN MONTHLY STEPS AND THE NEW RATE WILL BE $1.10 PER MONTH PER $100. INTEREST WILL BE CREDITED AS BEFORE IN RESPECT OF COMPLETED MONTHS BETWEEN PURCHASE AND SURRENDER IN PAYMENT OF TAX.

INTEREST IS ONLY CREDITED WHEN CERTIFICATES ARE USED TO PAY TAX AND NO INTEREST IS DUE WHERE THE PRINCIPAL VALUE OF A CERTIFICATE IS REPAID IN CASH.

THE NEW RATE WILL APPLY TO ALL CERTIFICATES ISSUED ON OR AFTER JULY 31, 1981.

/CERTIFICATES WHICH