XN000022-1993-12-17 — Page 7

5

FRIDAY, DECEMBER 17, 1993

THERE

HE SAID IT WAS TRUE ANYWHERE IN THE WORLD THAT IF CONTRIBUTIONS, BE THEY TAXES OR LEVIES, THEN OF COURSE THOSE WHO BETTER OFF WOULD TEND TO HAVE TO CONTRIBUTE MORE.

WERE

WERE

"THIS IS NOT A NEW CONCEPT FOR HONG KONG. THAT IS PRECISELY THE CONCEPT WHICH UNDERLIES OUR PRESENT TAXATION SYSTEM," HE SAID.

ASSUMING A FIRST

HE WARNED THAT TO HAVE A NON-CONTRIBUTORY SCHEME, QUALIFYING AGE OF 65, WOULD MEAN A BURDEN OF $13 BILLION IN THE YEAR ON TAXPAYERS.

HE ALSO CATEGORICALLY DENIED THAT THE GOVERNMENT WAS DELAYING TACTICS.

EMPLOYING

PURSUE A

"WE HAVE DECIDED THAT THE WAY FORWARD ON PROVIDENT FUNDS IS NOT COMPULSION BUT

DECIDED TO VOLUNTARISM. WE HAVE FURTHER COMPULSORY AND

SATISFIED CONTRIBUTORY OPS, SUBJECT TO BEING

NUMBER OF MAJOR ISSUES.

ON A

THE AND

"IT IS A FACT THAT WE NEED TIME TO WORK OUT THE DETAILS OF SCHEME, AND TO HAVE AN INFORMED DIALOGUE BOTH WITH THE COMMUNITY THE CHINESE GOVERNMENT. THIS IS TOO BIG AN ISSUE TO STAMPEDE AHEAD ON; WE MUST BE SURE OF OUR GROUND, HE SAID.

"

THE

SUGGESTION

HE

ANSWERED WITH AN UNAMBIGUOUS "NO" TO ALSO THAT THE GOVERNMENT WAS TRYING TO SAVE MONEY THROUGH THIS INITIATIVE.

HE

SAID THE SAVING FROM REPLACING THE EXISTING LOWER ALLOWANCES AND STANDARD RATE SOCIAL SECURITY PAYMENTS TO THE WITH OPS WOULD BE PLOUGHED BACK INTO FINANCING THE OPS.

"THERE

OLD AGE ELDERLY

AND FOR RUNNING LEFT AFTER THIS

WILL BE

MET NEW EXPENDITURE TO BE REGULATING THE SCHEME, AND THE BALANCE OF SAVINGS WOULD BE USED TO REDUCE CONTRIBUTIONS BY EMPLOYERS AND EMPLOYEES.

"THERE

AND

WILL BE FURTHER CONTRIBUTIONS FROM

THERE EMPLOYER.

WILL BE REDUCED PROFITS EMPLOYERS' CONTRIBUTIONS WILL COUNT AS EXPENDITURE,

TAX

TT

GOVERNMENT

REVENUE HE ADDED.

AS AN BECAUSE

TO BECOMING A RATHER EMOTIVE

COMMENTING ON THE SUGGESTION THAT THE GOVERNMENT WAS TRYING REDISTRIBUTE INCOME AND THAT HONG KONG WAS IN DANGER OF

MR MACLEOD SAID THESE IMPRECISE WELFARE LABELS WERE NOT HELPFUL TO THE DEBATE.

STATE,

FACT IS

AND

SOME

MORE THAN

"THE

BENEFIT THAT ALL TAX SYSTEMS OTHERS, HONG KONG IS NO EXCEPTION, HE SAID.

11

HEALTH

FOR EXAMPLE, HE SAID, THE GOVERNMENT SUBSIDISED HEAVILY

A NON-CONTRIBUTORY CARE, EDUCATION AND HOUSING AND IT ALSO PROVIDED SAFETY NET THROUGH THE SOCIAL SECURITY SYSTEM.

AND

GO BEYOND

HOWEVER, HE STRESSED THAT HONG KONG HAD BEEN VERY CAREFUL WOULD GO ON BEING VERY CAREFUL TO ENSURE THAT IT DID NOT WHAT IT COULD AFFORD.

"MOST

IMPORTANTLY,

OUR NEW PROPOSAL IS

ON BASED

CAREFULLY

BR

BALANCING THE TOTAL BENEFITS WITH THE TOTAL CONTRIBUTIONS; IT WILL A SELF-CONTAINED SET OF TRANSACTIONS IN A SEPARATE FUND, SEPARATE FROM

HE SAID. NORMAL GOVERNMENT EXPENDITURE AND REVENUE,

1+

/HE FURTHER