TNAG-0608-FCO40-756-Planning-paper-on-progress-made-on-social-security-in-Hong-K-1977 — Page 28

which was tested. However, he emphasized that in the last four years the value of Hong Kong's benefits had trebled in real terms, and that in the coming three years public assistance spending alone would rise by 60-70%.

5.

We asked whether the new contributory scheme could be introduced sooner. Mr Heppell maintained that the proposed introductory period was no longer than would be needed in the UK, while admitting that a strengthening of the Hong Kong bureaucracy, by the injection of trained personnel, would help to expedite introduction. He has advised Hong Kong to run the social security scheme through an extension of the social welfare staff, but with an independent authority to look after financing. Though the proposals could become law fairly quickly, Mr Heppell was concerned about ensuring that employers were able, and willing to pay their contributions.

6. Mr Heppell said that there were no real financial constraints placed upon his ideas, but that he had been conscious that extravagant proposals would be counter-productive.

7. On reaction to the proposals Mr Heppell told us that large employers had been more inclined to accept them than smaller ones, that the Communist press had made no real comment on the

He scheme and that popular reaction seemed to be favourable. noted that the process of consultation prior to the publication of the proposals had been effective.

8. Mr Heppell denied that the proposed 2% contribution was unduly low and that employers should be asked to pay more; arguing that it was essential to push the scheme through quickly before a possible recession.

9. Mr Heppell concluded by saying that he believed that the Hong Kong Government had gone as far as is feasible, at the present time, in their proposals, and that the need now was to push the measures through and ensure their implementation, before reviewing progress in about 1980. Mr Hurst concurred with this view.

HONG KONG & GENERAL DEPARTMENT

Distribution:

PS/Lord Goronwy-Roberts

Mr Cortazzi

Mr Murray

Mr Hurst

Mr Walsh

Mr M Stewart

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