TNAG-0789-FCO40-993-Development-of-social-policy-in-Hong-Kong-proposed-contribut-1978 — Page 184

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i

eg. sickness allowances, were paid from the contributory scheme, thus resulting in savings to the PAS, the Government could meet any criticism that the funding of benefits were being transferred from general revenue to private employers by paying into the contributory fund a financial contribution equal to those savings.

(iii) The Governor thought that the political risk of communist

employees and employers being required to pay compulsory contributions had possibly been exaggerated.

4.

!

Mr Heppell concluded that from the purely social insurance point of view a compulsory scheme was to be preferred. The Governor commented that a death knell to any scheme would be the hint that it was a prelude to the introduction of unemployment benefit. We emphasised the importance attached in this country, particularly by Labour Ministers and trade union leaders, to unemployment benefit, and queried whether as had been suggested by the Governor and Mr Dennis Bray it would be possible to convert a voluntary scheme into a compulsory scheme if the former had been found to be unsuccessful. The Governor's attitude to this was that in such an event it would be possible to fall back on a public assistance scheme, expanded if necessary.

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24 April 1978

RJ

HRG Hurst

Overseas Labour Adviser

CONFIDENTIAL