XN000022-1994-01-19 — Page 11

WEDNESDAY, JANUARY 19, 1994

GOVT PLEDGES SUBSTANTIAL FINANCIAL COMMITMENT TO OPS

THE GOVERNMENT UNDERTAKES TO PLOUGH BACK ALL POSSIBLE SAVINGS ON OLD AGE ALLOWANCES AND BASIC SOCIAL SECURITY PAYMENTS FOR THE ELDERLY, AMOUNTING TO BETWEEN $3 AND $4 BILLION IN 1993/94, INTO THE OLD-AGE PENSION SCHEME (OPS).

IN

ADDITION, THE GOVERNMENT AS AN EMPLOYER WILL CONTRIBUTE LEAST $700 MILLION FOR EVERY PER CENT OF CONTRIBUTION.

AT

"IF WE ALSO TAKE INTO ACCOUNT THE HUNDREDS OF MILLIONS OF DOLLARS IN TAX FOREGONE IF EMPLOYERS' CONTRIBUTIONS ARE TO BE MADE TAX-DEDUCTIBLE, AS IS THE CASE UNDER VOLUNTARY RETIREMENT SCHEMES, IT IS VERY CLEAR THAT GOVERNMENT HAS ALREADY PLEDGED TO TAKE ON A SUBSTANTIAL SHARE OF THE FINANCIAL COMMITMENT SHOULD THE SCHEME BE IMPLEMENTED, SAID MR W K LAM, ACTING SECRETARY FOR EDUCATION AND MANPOWER.

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MR LAM WAS REPLYING TO REMARKS MADE BY LEGISLATIVE COUNCILLORS DURING A MOTION DEBATE ON OPS IN THE LEGISLATIVE COUNCIL TODAY

(WEDNESDAY).

HE EMPHASISED THAT ANY CALL FOR FURTHER GOVERNMENT CONTRIBUTION MUST BE ASSESSED IN THE CONTEXT OF WHAT OUGHT TO BE THE FAIR SHARE OF THE BURDEN AMONG TAXPAYERS, EMPLOYERS AND EMPLOYEES.

"WE HAVE TO BE EXTREMELY CAREFUL NOT TO LET TAXPAYERS SHOULDER A DISPROPORTIONATELY LARGE SHARE OF THE CONTRIBUTIONS AS THE MORE THE SCHEME RELIES ON CONTRIBUTION FROM TAX REVENUE, THE HIGHER THE RISK OF WEAKENING THE IRON LINK THAT WE SEEK TO ESTABLISH BETWEEN PENSION PAYOUTS AND CONTRIBUTIONS FROM EMPLOYMENT EARNINGS," HE ADDED.

THE

то

ON THE PROPOSED OLD-AGE PENSION SCHEME, MR LAM REVEALED THAT GOVERNMENT WOULD BE APPOINTING CONSULTANTS IN THE NEXT FEW WEEKS ADVISE ON THE FOLLOWING ASPECTS WHICH WERE OF KEY CONCERN ΤΟ THE

PUBLIC:

*

*

HOW THE OPS COULD BE ESTABLISHED IN PRACTICE;

THE CONTRIBUTION LEVELS UNDER DIFFERENT SCENARIOS;

HOW CONTRIBUTIONS MAY BE COLLECTED FROM THE WORKING POPULATION, IN PARTICULAR THE SELF-EMPLOYED AND THOSE CURRENTLY OUTSIDE THE TAX NET;

WHETHER

THERE SHOULD BE A MAXIMUM AND MINIMUM SALARY LEVEL FOR CONTRIBUTION PURPOSES; AND

*

HOW OPS FUNDS SHOULD BE MANAGED IN THE MOST MANNER POSSIBLE.

COST-EFFECTIVE

OTHER QUESTIONS ABOUT THE OPERATIONAL ASPECTS OF THE OPS ALSO BEEN RAISED.

HAVE

/THESE INCLUDE