XN000022-1987-05-13 — Page 32

30

WEDNESDAY, MAY 13, 1987

HE NOTED THAT ASSUMING A CONTRIBUTION OF FIVE PER CENT OF SALAR IES FROM EMPLOYEES AND FIVE PER CENT FROM EMPLOYERS, THE AMOUNT OF THE FUND HAD BEEN ESTIMATED AT OVER $10 BILLION A YEAR

INITIALLY IF ALL THE WORKFORCE WAS TO BE COVERED.

+THE INVESTMENT OF CPF FUNDS ON THIS SCALE BY THE GOVERNMENT WOULD ALSO REQUIRE A SUBSTANTIAL FINANCIAL MANAGEMENT SYSTEM. LIKELY TO BE EXPENSIVE IN ITS OWN RIGHT, HE SAID,

MR CLYDESDALE SAID A CENTRAL PROVIDENT FUND WOULD BE BOUND TO INCREASE LABOUR COSTS.

HE NOTED THAT LOCAL MANUFACTURERS DID NOT HAVE THE MEANS TO CUSHIONING THE EFFECTS OF INCREASED PRODUCTION COSTS IN INDUSTRY THROUGH DOMESTIC PRICING MECHANISMS AS OVER 90 PER CENT OF THEIR PRODUCTION WAS EXPORTED AND THE IR PRODUCTS MUST REMAIN PRICE COMPETITIVE IN WORLD MARKETS.

HE SAID THERE WERE BETTER ALTERNATIVES TO A CENTRAL PROVIDENT FUND,

+ BELIEVE WE MUST NOW LOOK CLOSELY AT THE POSSIBILITY OF DEVELOPING SOME FORM OF OLD AGE PENSION WHICH IDEALLY WOULD NOT REQUIRE MEANS TESTING AND WHICH WOULD EVENTUALLY BE OPEN TO ALL QUALIFIED HONG KONG RESIDENTS AT AGE 65,+ HE SAID.

HE SAID THE GOVERNMENT WOULD BE RESPONSIBLE FOR THE PAYMENT OF OLD AGE PENSIONS AND THE COST WOULD OBVIOUSLY HAVE TO BE FOUND FROM GENERAL REVENUE.

+I APPRECIATE THAT THE FUNDING OF SUCH A PROPOSAL WOULD OBVIOUSLY HAVE TO BE VERY CAREFULLY CONSIDERED BUT I BELIEVE OUR ECONOMY COULD ACCEPT THE FINANCIAL COST, HE SAID.

HE PROPOSED THAT A COMMISSION BE SET UP TO STUDY THE PRESENT SOCIAL SECURITY SYSTEM IN ITS ENTIRETY, SUCH A COMMISSION COULD BE ASKED TO CONSIDER THE DEVELOPMENT OF AN OLD AGE SCHEME AS PART OF ITS TERMS OF REFERENCE.

HE SAID THAT IF THE GOVERNMENT DECIDED THAT A CENTRAL PROVIDENT FUND SHOULD NOT BE INTRODUCED IN HONG KONG, THEN THE WAY WAS CLEAR FOR AN IMPROVEMENT IN EXISTING SOCIAL SECURITY MEASURES.

+HOWEVER, THESE MUST BE LOOKED AT AS PART OF AN OVERALL SYSTEM WHICH NOT ONLY PROVIDES COMPREHENSIVE SERVICES AT AN ACCEPTABLE COST BUT WHICH IS DEVELOPED AS A WHOLE RATHER THAN AS A SERIES OF RELATED BUT UNCO-ORDINATED MEASURES WHOSE COST CANNOT BE ACCURATELY ASSESSED, HE SAID.

131