XN000022-1987-05-13 — Page 25

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WEDNESDAY, MAY 13, 1987

HE SAID IF AN EMPLOYEE HAD THE OPTION TO USE HIS CONTRIBUTION AS COLLATERAL FOR A HOUSING LOAN, THIS WOULD SUBSTANTIALLY INCREASE THE POPULARITY OF PROVIDENT FUNDS.

TO ENCOURAGE SMALL FIRMS TO SET UP SUCH SCHEMES, MR LI SAID THE GOVERNMENT SHOULD BROADEN ELIGIBILITY FOR THE EXISTING LONG SERVICE PAYMENT SCHEME, FOR INSTANCE, BY SHORTENING THE MÍNIMUM PERIOD OF SERVICE FROM 10 YEARS TO FIVE YEARS.

+AS EMPLOYERS' LIABILITIES ON THE LONG SERVICE PAYMENT SCHEME CAN BE OFFSET BY THEIR CONTRIBUTION TO APPROVED PRIVATE PROVIDENT FUNDS. EMPLOYERS WOULD HAVE A GREATER INCENTIVE TO ESTABLISH PRIVATE FUNDS IF THE PRESENT LONG SERVICE PAYMENT SCHEME IS BROADENED, MR LI SAID.

PRIVATE PROVIDENT FUND SCHEMES FAVOURED

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THE HON HELMUT SOHMEN TODAY (WEDNESDAY) SAID HE FAVOURED A SYSTEM OF VOLUNTARY PRIVATE PROVIDENT FUND SCHEMES.

SPEAKING IN THE LEGISLATIVE COUNCIL DURING THE ADJOURNMENT DEBATE ON CENTRAL PROVIDENT FUND, MR SOHMEN SAID THAT WHEN HE TRAVELLED AROUND THE WORLD AND TRIED TO EXPLAIN THE ESSENCE OF HONG KONG'S SUCCESS STORY. HE INVARIABLY REFERRED TO THE DILIGENCE AND THE DEDICATION OF THE TERRITORY'S WORKING POPULATION AS ONE OF HONG KONG'S MOST IMPORTANT ASSETS.

THERE WAS NO QUESTION THAT HONG KONG SHOULD THEREFORE LOOK AFTER ITS INDUSTRIOUS WORKFORCE, HE SAID.

+ BUT IN THESE DISCUSSIONS I ALSO ALWAYS MENTION THAT OUR WHOLE ECONOMIC SYSTEM AND OUR POLICIES ARE BASED ON THE STRONG BELIEF IN THE BENEFITS OF ALLOWING MAXIMUM INDIVIDUAL CHOICE, HE SAID.

HE SAID HE WAS SURPRISED THAT A CALL FOR AN INCREASE IN TAXATION, AND FOR CEDING TO GOVERNMENT THE AUTHORITY TO DECIDE HOW AND WHAT PEOPLE SHOULD INDIVIDUALLY SAVE, AND HOW THESE SAVINGS SHOULD BE INVESTED WHICH WAS WHAT A CENTRAL PROVIDENT FUND WOULD DO -- WAS FINDING SUPPORT IN HONG KONG.

+ IT RUNS COUNTER TO OUR TRADITIONAL BELIEF IN FREEDOM OF CHOICE, AND THE INTRODUCTION OF A CENTRAL PROVIDENT FUND COULD WELL BE THE BEGINNING OF THE END OF HONG KONG'S ABILITY TO PROGRESS THROUGH A PROVEN RELIANCE ON OUTSTANDING INDIVIDUAL EFFORT, HE SAID.

HE QUESTIONED