XN000022-1995-07-07 — Page 13

- 11 -

Air Services Agreements

Coming back now to aviation matters. Construction of Hong Kong's new airport can now, with last week's agreement, press full steam ahead. But who will use the new airport? We wish to ensure that as complete a set of Air Services Agreements as possible will be in place on 1 July 1997. The two sides have been negotiating on this subject since 1986. But regrettably, after an encouraging start, recent progress has been very slow. So far, 11 Air Services Agreements have been signed, but many more (about 40) Air Services Agreements and Air Transit Agreements will need to be concluded to maintain Hong Kong's status as an international and regional civil aviation centre. It is clearly in Hong Kong's interest, and indeed in China's, that the outstanding agreements are resolved before 1997. Again, we need to see substantive progress on this subject in the months ahead.

Retirement Protection

The physical infrastructure of the Airport and Container Terminals is undoubtedly important. But we also need to improve our social infrastructure. For example, I do not think there is anyone in the community who would deny that those members of our workforce, both employees and the self-employed, who have contributed to our economic well-being and stability, deserve to pass their retirement in dignity and financial security. At present, there are about 560,000 people over the age of 65. That number will rise to about 1 million by the year 2016. For many years now, we have been discussing the best way of providing for such retirement protection in Hong Kong and quite frankly, we cannot go on talking, we must now take positive action to proceed. And after extensive consultation with the Legislative Council and within the community, we have now put forward firm proposals on how this important issue should be addressed.

From the results of submissions and in subsequent discussions received on the proposal for the Old Aged Pension Scheme, we have concluded that a system of Mandatory Provident Fund Schemes is the one that most accords with Hong Kong's way of life and one that commands the most support. That is why we introduced a Bill into the Legislative Council last month to provide for an accountable retirement protection system.

The MPF Schemes Bill will provide for retirement protection coverage for all employees and self-employed persons between the ages of 18 and 65, unless they fall into one of the exempted categories. Employers and employees would each be required to contribute 5% of the latter's relevant income to a registered scheme. All benefits derived from these contributions would be preserved until the beneficiary reached the age of 65, left the workforce permanently at or after the age of 60, or under prescribed circumstances such as emigration. There would be provision for the accrued benefits to be transferred from the scheme operated for the former employer to that run for the new employer when an employee changes job.