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to be of the opinion that now the outline of such a scheme has been made public there could be no turning back. In their conversations with me they generally supported the view that any scheme should be compulsory. They believed this was necessary to provide an actuarial basis and to enable assessments to be made of the scale of benefits. The employers generally felt that more details of the scheme were needed and that detailed consultations would be necesary well after the "Green Paper stage". They felt compulsion was also necessary to give administrative efficiency; to maintain mobility of labour, and to prevent some employers, not participating in the scheme, being given an unfair competitive advantage. The Federation of Industries, the Chinese Manufacturers Association and the Chamber of Commerce said they would be submitting their views to the Government before the time limit set by the Green Paper of 31 March 1978.
32.
Trade unions have also been crystallising their views on the Green Paper and it is noteworthy that at a seminar arranged by the Labour Department 5 of the 6 unions present were communist unions. My trade union contacts on the HK Trades Union Council also supported a compulsory rather than a semi-voluntary scheme, with more substantial contributions (5% employee: 5% employer) and a more generous and wider range of benefits. They particularly favoured the idea of a retirement benefit at the age of 60, Unlike most employers, they wished to see unemployment benefit incorporated in the scheme and believed young workers would support the scheme because of the benefits (eg. sickness payments and housing loan facilities) they could expect during their working lifetimes. They added that the Government should be a financial contributor to the scheme and when actuarial details became available workers should be fully informed by the Government of the scale and size of benefits contemplated.
If a
33. The tentative outline of a contributory social security scheme has clearly aroused great interest and if the ideas summarised in the two preceding paragraphs represent "final positions" on the part of employers and trade unions then a great deal of re-thinking, re-examination and re-consultation will be necessary. compulsory insurance-type scheme were to be the goal, the future role of the Public Assistance Scheme would also need to be defined: eg. would it become a Supplementary Benefits scheme akin to that of the United Kingdom? Would a compulsory scheme be based on a percentage of wages or on flat rate contributions and a uniform scale of benefits? Would there be a public reaction against the Government for making social security a charge on workers and employers by compelling them to participate in a contributory scheme rather than funding a Public Assistance Scheme (which is well under- stood by the Hong Kong public) from general revenue? All these questions would require expert advice and Mr Heppell of the UK DHSS with his specialised knowledge of Hong Kong may be able to play a part. When decisions are made, I understand they will be systematic- ally and regularly explained to Hong Kong wage-earners through the media available to the Government Information Services.
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/34 On a visit
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