XN000022-1983-03-24 — Page 18

THURSDAY, MARCH 4, 1983

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BUT HE POINTED OUT THAT SOME SERVICES CLASSIFIED AS CATEGORY 1 ONLY RECEIVED EITHER A FIXED PERCENTAGE SUBVENTION DETERMINED ON THE AVERAGE LEVEL OF FINANCIAL SUPPORT PREVIOUSLY GIVEN OR A LUMP SUM GRANTED ARBITRARILY.

SUCH ARRANGEMENTS WERE CAUSING FINANCIAL AND ADMINISTRATIVE DIFFICULTIES TO AGENCIES PROVIDING SERVICES CLASSIFIED AS CATEGORY 11, SUCH AS THOSE OPERATING SOCIAL CENTRES AND MULTI-SERVICE CENTRES FOR THE ELDERLY, HE SAID.

ANOTHER AREA WHERE AGENCIES ARE BEING HIT FINANCIALLY IS SUBVENTION GRANTED TOWARD ADMINISTRATIVE EXPENSES, MR HU SAID.

+A MORE LIBERAL AND GENEROUS POLICY ON SUBVENTING THESE TWO SERVICES WILL GO A LONG WAY IN ACHIEVING MORE POSITIVE RESULTS OF OUR MOST ADMIRABLE NEW SUBVENTION SYSTEM ON WHICH WE ARE READY TO SPEND OVER $350 MILLION IN 1983/84.

+A LITTLE MORE MONEY ALLOCATED TO THESE AREAS WILL BE MONEY WELL SPENT, HE ADDED.

STUDY OF DEPOSIT INSURANCE SCHEME URGED ****

THE HON ANDREW SO CALLED ON THE GOVERNMENT TO MAKE AN IN-DEPTH STUDY OF THE FEASIBILITY OF ESTABLISHING A DEPOSIT INSURANCE PROGRAMME IN HONG KONG.

HE SUGGESTED AT THE LEGISLATIVE COUNCIL THAT HONG KONG SHOULD LEARN FROM THE PROGRAMMES OF OTHER COUNTRIES AND SET UP A PRUDENT SUPERVISORY SYSTEM CONGRUOUS TO HONG KONG TO PROTECT THE INTERESTS OF THE WHOLE COMMUNITY.

→IN FACT, HE SAID, IT IS NOT ABSOLUTELY NECESSARY FOR THE GOVERNMENT TO BE RESPONSIBLE FOR A SYSTEM.

+A 'DEPOSIT INSURANCE CORPORATION' MAY BE ESTABLISHED IN HONG KONG, OR THE FINANCIAL INSTITUTIONS THEMSELVES MAY DEVISE A STABILISATION SYSTEM TO PROVIDE SUCH SERVICES AS LOAN GRANTS, FINANCIAL MANAGEMENT, COLLECTION OF BAD DEBTS, AMALGAMATION, LIQUIDATION AND REORGANISATION FOR THE IR MEMBERS WHO MAY HAVE FINANCIAL DIFFICULTIES.+

HE NOTED THAT THE QUESTION OF WHETHER OR NOT SUCH A SYSTEM SHOULD BE SET UP IN HONG KONG HAD AROUSED SOME PUBLIC DEBATE, AFTER A FEW FINANCE COMPANIES HAD RUN INTO DIFFICULTIES.

IN HIS OPINION, INSURANCE WAS ONLY A METHOD OF RISK MANAGEMENT AND LOSS PREVENTION BUT IT HELPED A LOT TOWARDS ENSURING PRUDENT MANAGEMENT AND BOOSTING CONFIDENCE.