TNAG-0789-FCO40-993-Development-of-social-policy-in-Hong-Kong-proposed-contribut-1978 — Page 166

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HKK 234/1

RECEIVED IN REGISTRY NO. 51 29 JUN1978

FM HONG KONG 2906552

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TO PRIORITY PEKING TELNO.81 OR 29 JUNE 78,

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PROPOSED SICKNESS, INJURY AND DEATH BENEFIT SCHEME.

1. AT PRESENT, IN ADDITION TO THE ARRANGEMENTS FOR EDUCATION, HEALTH SERVICES AND HOUSING, SOCIAL SECURITY IN HONG KONG IS BASED ON PAYMENTS WHICH ARE EITHER MEANS-TESTED ON A FAMILY BASIS, AS IN PUBLIC ASSISTANCE, OR PAID AS A RIGHT, AS IN THE CASE OF OLD AGE AND DISABILITY ALLOWANCES.

2. LAST YEAR WE PUBLISHED PROPOSALS IN A GREEN PAPER TO SUPPLEMENT THESE ARRANGEMENTS WITH A CONTRIBUTORY SCHEME GIVING IT ALSO PROVIDED FOR COVERAGE FOR SICKNESS, INJURY AND DEATH. SOME FORM OF RETIREMENT BENEFIT. ACTUARIAL ADVICE IS THAT IT COULD BE FUNDED BY MATCHING CONTRIBUTIONS OF TWO PERCENT OF WAGES EACH BY EMPLOYEES AND EMPLOYERS. THE GREEN PAPER PROPOSED THAT THE SCHEME SHOULD BE VOLUNTARY FOR EMPLOYEES BUT COMPULSORY FOR AN EMPLOYER IN RESPECT OF ANY OPTING EMPLOYEE UNLESS THE EMPLOYER ALREADY PROVIDED BETTER COVER THAN THAT IN THE GOVERNMENT SCHEME.

3. THERE HAS BEEN A GOOD DEAL OF PUBLIC DEBATE ABOUT THIS PROFOSAL WHOSE BROAD OBJECTIVES HAVE RECEIVED SUPPORT. HOWEVER THERE IS DISAGREEMENT AS TO WHETHER THE SCHEME SHOULD BE COMPLETELY COMPULSORY OR VOLUNTARY TO THE DEGREE PROPOSED, A PUBLIC OPINION POLL CONDUCTED FOR THE GOVERNMENT BY THE UNIVERSITY OF HONG KONG SHOWED A SLIGHT MAJORITY OF BOTH EMPLOYEES AND EMPLOYERS IN FAVOUR OF A VOLUNTARY SCHEME. ON THE OTHER HAND SOUNDINGS AMONGST UNOFFICIAL MEMBERS OF THE LEGISLATIVE COUNCIL AND INDUSTRIAL, TRADE UNION AND SOCIAL WORKERS' ORGANISATIONS INDICATED A PREFERENCE FOR COMPULSION. THE LATTER REFLECTS RECOGNITION OF

THE MERITS OF SIMPLICITY AND UNIVERSALITY IN SUCH A SCHEME.

CONFIDENTIAL.

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