XN000022-1994-02-02 — Page 23

THE WELFARE STATE

ON

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WEDNESDAY, FEBRUARY 2, 1994

TO

PEGGING A STANDARD

TO THE MEDIAN WAGE AT 30% WILL MEAN A FUNDAMENTAL DEPARTURE FROM OUR CSSA SCHEME BY REMOVING THE ELEMENT MEET THE SPECIAL NEEDS OF INDIVIDUALS. AND SOME OF THE INDIVIDUALS COULD GET MUCH MUCH LESS. IF, ON THE OTHER HAND, THE ARGUMENT IS NOT ONLY TO PEG THE STANDARD RATES AT 30% BUT ALSO TO RETAIN THE SPECIAL

A GRANTS,

A MONTH. FAMILY OF FOUR COULD GET AN AVERAGE OF $11,000 THEN IS THE INCENTIVE TO WORK? WHERE

WORK INDEED, WHY BOTHER TO ALL WHEN OTHERS PAY YOUR WAY! AND AN AVERAGE WORKER GETS MUCH LESS! THIS THEN IS WELFARE STATE. THIS THEN IS DEPENDENCY CULTURE.

AT MUCH

MR PRESIDENT, I SHOULD PERHAPS REPORT AT THIS JUNCTURE THAT ONE OF MY COLLEAGUES HAS JUST ATTENDED AN INTERNATIONAL CONFERENCE ON "THE THIS IS FUTURE OF THE WELFARE STATE". WELFARE STATES HAVE NO FUTURE. THE FEEDBACK. WELFARE STATES ARE NOW FACING FISCAL CRISES. THEY CAN NO LONGER AFFORD TO PAY FOR THE WELFARE BENEFITS. IF THE CSSA, BEING THE PIVOTAL CENTRE OF OUR SOCIAL SECURITY, SHOULD BE CHANGED TO ONE PEGGED TO EARNINGS AND NOT NEEDS, HONG KONG WILL BE PROPELLED DOWN THE ROAD OF THE WELFARE STATE. THIS ROAD HAS BEEN TAKEN BY MANY POST-WAR WESTERN SOCIETIES WHERE THE WELFARE STATE WAS ONCE HERALDED AS THE ACHIEVEMENT OF THE CENTURY. THESE SAME SOCIETIES ARE NOW UNDERGOING A VERY PAINFUL PROCESS OF CHANGE. THE NEW WISDOM "IS THAT THE STATE SHOULD BE THE REGULATOR AND ENABLER RATHER THAN THE SOLE PROVIDER. THIS IS A SOBERING THOUGHT.

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OLD AGE PENSION SCHEME

HONOURABLE MEMBERS WHO PLEA SO PASSIONATELY FOR MORE SUPPORT TO THOSE IN NEED ARE WELL ADVISED ALSO TO SUPPORT THE CONTRIBUTORY AND DEFINABLE PENSION SCHEME FOR THE ELDERLY, IN ADDITION TO THE CURRENT CSSA SCHEME. LET US NOT CONFUSE THESE TWO SCHEMES WHICH ARE NOT ONLY COMPLEMENTARY TO EACH OTHER, BUT WOULD BE IN LINE WITH THE NEW WISDOM, WITH PARTICULAR REFERENCE TO HELPING THE ELDERLY PEOPLE IN OUR SOCIETY.

PUBLIC FINANCE

IN RECENT YEARS OUR PUBLIC FINANCES HAVE BEEN IN A VERY HEALTHY STATE THANKS TO THE STRENGTH OF THE ECONOMY. BUT WE MUST REMEMBER THAT WE ARE VULNERABLE TO EXTERNAL EVENTS. A BUDGET SURPLUS IN ONE YEAR,

RESULTING IN PART FROM VOLATILE REVENUE SOURCES SUCH AS STAMP DUTY, CAN EASILY DISAPPEAR AND MAY EVEN BECOME A BUDGET DEFICIT IN THE NEXT. IT WOULD BE FOOLHARDY TO TRY TO USE ONE-OFF SURPLUSES TO FINANCE PERMANENT AND SUBSTANTIAL INCREASE IN OUR RECURRENT EXPENDITURE. IF WE WISH TO CONTINUE LIVING WITHIN OUR MEANS, GOVERNMENT SPENDING MUST NOT BE ALLOWED TO GROW AT A FASTER RATE THAN

THE ECONOMY,

/CONCLUSION

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