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CONFIDENTIAL,
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34.
On a visit to a District Social Welfare Office I was impressed by the care and sympathy shown to applicants for Public Assistance but, as the Green Paper itself points out at paragraph 8.3 , present social welfare and social security practices in Hong Kong leave "unprotected for some contingencies many workers who would be hard hit by prolonged absence from work through sickness or unemployment" Paragraph 8.? also acknowledges that the Public Assistance Scheme is of limited value when there is more than one wage earner and that, according to the 1976 By-Census, 50% of families have more than one working member. This, in my view, underlines the case for a compulsory and contributory social security scheme.
35
The 1978/79 budget provides for a 36% increase in expenditure on social services (Education, Medical Services, Labour, Social Wel- fare, Subsidised Housing) and total expenditure on this item amounts to 42% of the total budget. These are impressive figures: but listening to the Financial Secretary's budget speech and hearing of a surplus for the 1977/78 financial year of HK$ 1,075 million, one must ask the question Is any increase in social expenditure possible and justified in Hong Kong? My first question would be: Should the surplus, which is apparently of regular occurrence, be utilised, for example, to increase the real value of Public Assist- ance scales of benefit? I acknowledge that their real value is maintained from year to year by means of a special index based on the pattern of expenditure of the lowest income groups. I accept the case that a proportion of budget surplus should be reserved to meet contingent liabilities. I also see that the Government has acknowledged the importance "of achieving a growth rate of public expenditure in real terms next year (1978/79) high enough to bring the average growth rate over the five-year period 1974-75 to 1978- 79 up to the 10% guideline defining steady progression"*(which I take as an indication of a continuing growth on public expenditure and a continuing increase in the "social wage" to the benefit of the lower income groups). I agree too that there would be problems if the benefits available were permitted to overtake the average monthly earnings of a manufacturing worker (HK$ 910, excluding overtime paragraph 60 of "The 1978-79 Budget: Economic Background Nevertheless one must ask the question: Should the real value of the scales of benefit under the Public Assistance Scheme be at.. least moderately increased at some future date if budget surpluses continue? In answering this question it would be helpful, in the light of the quotation from paragraph 8.2 cited in paragraph 34 above to the effect that 50% of families in Hong Kong have more than one working member, to know the number of cases receiving Public Assistance in the range of HK$ 800-900 per month compared with the number in the lower reaches of the scheme. I have been left with the feeling that the present Public Assistance Scheme may place too much reliance on the family (or household) rather than the individual. Levels of family income are one of the main criteria for eligibility for relief under the scheme rather than individual circumstances. Will the extended family system survive in Hong Kong? As a member of the Colonial Service, I saw the system breaking down in Africa under the pressures of increasing industrialisation and urbanisation. The same pressures exist in
The Financial Secretary in his budget speech of 1 March.
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CONFIDENTIAL
/Hong Kong
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