TNAG-0789-FCO40-993-Development-of-social-policy-in-Hong-Kong-proposed-contribut-1978 — Page 171

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TO IMMEDIATE PEKING TELNO 262 OF 22 MAY

SOCIAL SECURITY AND HEALTH IN HONG KONG

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HKK 234/1

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RECEIVED IN REGISTRY NO. 51 2 3 MAY 1978

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BIGUSTRY Action T Be

1. THE SECRETARY OF STATE FOR HEALTH AND SOCIAL SERVICES MAY CARE TO HAVE THE FOLLOWING BRIEF CONFIDENTIAL NOTE ABOUT CONDITIONS IN HONG KONG,

2. THE ONLY SOCIAL SECURITY PROVISION IN HONG KONG AT PRESENT IS THE PUBLIC ASSISTANCE SCHEME, SIMILAR TO UK SUPPLEMENTARY BENEFIT. THE BASIC RATE IS HK DOLLARS 200 (POUNDS 23) PER MONTH. THE SCHEME IS NON-CONTRIBUTORY BUT MEANS-TESTED ON FAMILY INCOME, EXCEPT FOR CLD-AGE (75 PLUS) AND DISABILITY BENEFITS,

3. A RECENT HONG KONG GREEN PAPER, BASED IN PART ON ADVICE FROM MR HEPPEL OF DHSS, PROPOSED IMPROVEMENTS TO THE EXISTING SCHEME AND A VOLUNTARY CONTRIBUTORY SICKNESS, INJURY AND DEATH BENEFIT SCHEME WITH EQUAL CONTRIBUTIONS FROM EMPLOYER AND EMPLOYEE. RECENT DISCUSSIONS WITH THE GOVERNOR SUGGEST THAT THE SCHEME WILL BE MADE COMPULSORY, WHICH HAS CONSIDERABLE PUBLIC SUPPORT, WE ENDORSE THIS AND BELIEVE THAT THERE IS ALSO A STRONG CASE FOR A GOVERNMENT FINANCIAL CONTRIBUTION OVER AND ABOVE THE ADMINISTRATIVE ARRANGE- MENTS WHICH THE GOVERNMENT PROPOSE TO UNDERTAKE.

4. WE ALSO FAVOUR EXTENDING THE SCHEME TO UNEMPLOYMENT AND OLD AGE PENSIONS AS SOON AS POSSIBLE. THE CONCEPT OF UNEMPLOYMENT BENEFITS AS OF RIGHT HOWEVER, FINDS LITTLE FAVOUR IN GOVERNMENT AND BUSINESS CIRCLES IN HONG KONG WHERE RELIANCE IS PLACED ON THE CHINESE EXTENDED FAMILY SYSTEM BUT THERE ARE SIGNS THAT THIS SYSTEM IS BREAKING DOWN. VE ALSO FEEL THAT UNEMPLOYMENT INSURANCE COULD BE A VITAL FACTOR IN SAFEGUARDING SOCIAL STABILITY IN THE EVENT OF SEVERE ECONOMIC DEPRECIATION HITTING HONG KONG. WE DO NOT ACCEPT AS VALID THE HONG KONG ARGUMENT THAT UNEMPLOYMENT INSURANCE WOULD UNDERMINE THE PUBLIC ASSISTANCE SCHEME. OLD AGE PENSIONS PRESENT GREATER PROBLEMS BECAUSE OF UNCERTAINTY OVER HONG KONG'S FUTURE AFTER 1997. BUT IF THESE

CONFIDENTIAL

WERE