TNAG-0789-FCO40-993-Development-of-social-policy-in-Hong-Kong-proposed-contribut-1978 — Page 183

CODE IS-77

CONFIDENTIAL

Reference

LA/HK/2

43

র%

Mr Stewart HKGD

HONG KONG: SOCIAL SECURITY

7 V

HKK 234/1

RECEIVED IN REGISTRY NO. 51

27 APR 1978

DESK OFFICER INDEX

PA

REGISTRY Action Tean

markola

1. I attempted to note the Governor's concluding remarks at this morning's meeting at the Hong Kong Government Office on a social security scheme for Hong Kong. He spoke to the following effect:-

2.

A memorandum should go to Executive Council to ascertain their views on whether a contributory social security scheme should be compulsory for employees and employers or voluntary on the basis proposed in the Green Paper. The memorandum should express a preference for a compulsory scheme. If ExCo advised to the effect that a compulsory scheme was not a good idea and would mainly serve to provoke opposition in Hong Kong to the concept of a contributory social security scheme, the Government should nevertheless implement a voluntary scheme as set out in the Green Paper and should try to make it work. A voluntary scheme might well turn out to be the basis for a subsequent compulsory scheme. A remit should be obtained from ExCo in time for the next phase to begin at the end of June. When the outline of a scheme has been decided, -the offer of the Government Actuary to send one of his

staff to Hong Kong should be followed up.

The Governor also had in mind that Mr Heppell should visit Hong Kong for two weeks to advise on the drafting of the ExCo memorandum and be present at the ExCo meeting at which it was discussed. The Governor thought the memorandum should show what social security benefits are now provided free of charge; what additional benefits are proposed and the sources from which they would be funded; the difference in levels of contributions and benefits if the scheme is (a) compulsory, or (b) voluntary; and the time scale for phasing in a compulsory scheme.

3. The following points were also mentioned:-

(i) An employers' proposal that the need for a contributory

scheme would be avoided by extending the scale of sickness allowances payable under the Employment Ordinance was ruled out as something of a 'red herring'. It would necessitate the introduction of compulsory insurance and this would militate against the mobility of labour and make for inflexibility ie. the Government could not adapt the scheme to provide for new contingen- cies.

(ii) The repercussions on the public assistance scheme of a compulsory social security scheme were difficult to evaluate. Mr Heppell suggested that if some benefits,

/eg. sickness

allowances

CONFIDENTIAL