TNAG-0450-FCO40-515-Reports-of-Overseas-Labour-Adviser-on-visits-from-UK-to-Hong-1974 — Page 70

Annexe A

1.

SOCIAL SECURITY IN HONG KONG

NOTE BY OVERSEAS LABOUR ADVISER

(1965)

The development of a Social Security system in Hong Kong will depend on the willingness of the community to pay for it. The cost would have to be met either from the contributions of those who benefit from it and their employers; or by the community at large through general taxation; or by a combination of both.

2.

A scheme covering the whole population could hardly be financei otherwise than from general taxation, since the administrative problem of collecting contributions from individuals would be insurmountable. General taxation for the purpose of providing benefits for a particular segment of the population, or for a scheme of limited coverage, might be difficult to justify. Arguments against a Government loan to meet the cost of establishing a scheme, or payment by Government of the administrative costs of a scheme, would be open to fewer objections.

3. The first stage must be the identification of local needs, and some light may be shed on these by the preliminary survey being carried out by Frofessor Lady Williams. Unemployment is not a problem at present. Sickness needs have been slightly alleviated by the enactment of the Industrial Employment (Holidays with Fay and Sickness Allowance) Ordinance, which provides inter alia for sick- ness allowance at half-pay up to twelve days a year.

Benefits are

confined to employed workers whose wages do not exceed HK$700 a month, but medical services are available to all at nominal charges. which can be waived in needy cases. It was, however, the problem of old age which may regarded as the most immediate need. The strong Chinese family system has in the past adequately provided for the aged; many claim it still does; but there is apparently accumulating evidence that the urban conditions of Hong Kong life are breaking the system down.

4.

5.

The problem, therefore, would seem to fall into two parts

(a) meeting immediate and interim needs arising from

unemployment, sickness, old age and widowhood, by suitable social welfare arrangements;

(b)

the institution of some form or forms of social security organised on a contributory basis to meet the needs of the future.

If it is confirmed after enquiry that provision for old age is the most pressing local need, then a decision will need to be taken whether to pay to all on a non-contributory basis, i.e. from general taxation, or to have a contributory scheme. If any form of pensier. is to be paid in either case, then the most careful actuarial calculations will need to be made, particularly having regard to the existing uneven spread of age groups and the preponderance of the young.

An alternative to a pension scheme is a Government operated provident fund imposing the obligation on all workers

/to contribute