TNAG-0789-FCO40-993-Development-of-social-policy-in-Hong-Kong-proposed-contribut-1978 — Page 27

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4.

In January 1973 the Hong Kong Government considered a

further extension of the Public Assistance Scheme. It was only then that a fuller considerationdof a contributory social

Insurance Scheme, took place. The Executive Council debated a memorandum which came down strongly against such a scheme.

The memorandum argued that it would be difficult to enforce because the main benefit, old-age pensions, was a long term prospect and the 1997 date would loom large in the minds of the predominantly youthful population. Secondly, asking employers to make the contributions on behalf of their work-force would prove

a severe financial burden that might well affect their competitiveness in world markets. Finally, a contributory scheme would require a further build-up of the administrative machinery, a process that would take some time.

5. The Governor, in his despatch of 18 April 1973 maintained the line that Hong Kong was a thriving capitalist economy that encouraged the individual to better himself as he saw fit and the people of Hong Kong showed no interest in social insurance schemes for a variety of possible reasons. This despatch was submitted to Mr Royle. His comment is the only one by a Minister that appears on the papers dealing with the Public Assistance Scheme. The Overseas Labour Adviser, Mr Foggon, was perhaps more sceptical.

He dismissed the assertion that a Social Assistance Scheme funded by employers would saddle them with a heavy financial burden and claimed instead that the absence of social security gave Hong Kong an unfair advantage in world markets. On the other hand, he accepted that the shadow hanging over Hong Kong's future in 1997 was an argument against setting up the sort of fund, which a system of social security would require.