TNAG-0788-FCO40-992-Development-of-social-policy-in-Hong-Kong-proposed-contribut-1978 — Page 145

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the social welfare experts looked at the scheme, the less attractive this particular method seemed. In particular, a monthly supplement had two major disadvantages. First,

it would put the income of those regularly receiving the supplement some $200 above that of a family which had just failed to qualify for any public assistance at all. Secondly, it did not really meet the need, since capital expenditure for a household comes up only occasionally and not every month. A monthly supplement would probably be put towards ordinary recurrent expenditure and then not be available when it was needed.

5.

The long-term supplement scheme was accordingly altered to provide for a single payment each year. The amount was fixed at $500. At the same time, the qualifying period was lowered from the proposed 18 months to 12 months. These recommendations were agreed by the Government-appointed Social Welfare Advisory Committee which advises the Government on all matters of social welfare policy. More significantly in a way, they were also agreed by the Council of Social Services. This latter group is the central body of all the voluntary agencies; besides containing many experts, it is also notable for frequently being critical of the Government's failure to be sufficiently ambitious in its social welfare policies.

6.

I think it is fair to say that, when this new proposal came up for discussion and approval in the Executive Council (see Exco Memorandum XCC(78)17), many of those present were surprised that the sum proposed was considerably smaller than 12 monthly payments at the rate previously suggested (i.e. $500 instead of $2,400). The rationale for the smaller amount was that no more would normally be needed for the sort of annual expenditures it was designed to cover. Exco would probably have been prepared to settle for a higher figure. Faced, however, with the advice of the experts, including the agreement of the normally critical Council of Social Services, they thought it would be wrong to decide on anything more generous at this stage. Nevertheless, Exco decided that the supplement should be index-linked and that the amount would be kept under review to see whether it really met the needs of those concerned. In practice, this means that an exercise will be carried out in the autumn to see if general inflation requires an increase in the rate, and the whole subject will be reviewed during 1979.

7.

The new policy on the long-term supplement has been announced in the press. Reaction from both the English and Chinese language papers has been favourable. There have been no suggestions that the amount should be greater. We shall have to see over the course of the next year, however, whether this favourable public reaction is justified by the extent to which the new policy meets the actual needs of those obliged to rely on Public Assistance for over a year.

/contd.........

CONFIDENTIAL