TNAG-0789-FCO40-993-Development-of-social-policy-in-Hong-Kong-proposed-contribut-1978 — Page 50

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TO PRIORITY HONG KONG TELNO 677 OF 31/8/78

HO'S LETTER OF 11 AUGUST TO MCLAREN AND YOUR TELNO 1046 :

PROPOSED SICKNESS, INJURY AND DEATH BENEFIT SCHEME

1. WE REGRET WE WERE UNABLE TO GIVE COMMENTS BY YOUR DEADLINE,

THOUGH IN FACT WE HAVE NONE ON MUCH OF THE MEMORANDUM AS IT STANDS.

2. HOWEVER WE HOPE THE MEMORANDUM CAN GIVE A CLEARER INDICATION

OF GOVERNMENT POLICY THAN EMERGES IN THE PRESENT DRAFT. AS YOU KNOW,

MINISTERS BELIEVE THAT TO FULFIL THEIR OBLIGATIONS TO HONG KONG THEY

MUST BE ABLE TO SHOW THAT PROGRESS IS BEING MADE TOWARDS THE

INTRODUCTION IN HONG KONG OF A COMPREHENSIVE SOCIAL SECURITY SCHEME.

EXCO SHOULD PRESUMABLY KNOW AT THE OUTSET THAT THIS IS THE

GOVERNMENT'S EVENTUAL AIM. SEEN FROM HERE THERE IS MUCH TO BE SAID

FOR PRESENTING THE MEASURES NOW PROPOSED AS THE FIRST STEP TOWARDS

THIS OBJECTIVE AND FOR EXCO TO BE STEERED FIRMLY TOWARDS A

COMMITMENT TO THEIR IMPLEMENTATION BY THE END OF 1960.

3. WE WELCOME THE CLEAR PREFERENCE THAT EMERGES FROM THE DRAFT

PAPER FOR A COMPULSORY CONTRIBUTORY SCHEME AND TRUST THAT EXCO WILL

ENDORSE THE PROPOSAL THAT THE GOVERNMENT SHOULD AT LEAST BEAR THE

ADMINISTRATIVE COSTS OF THE SCHEME. BUT WE HOPE THIS WILL NOT BE

SEEN AS THE LIMIT OF THE GOVERNMENT CONTRIBUTION. THERE WOULD SEEM

ADVANTAGE IN STATING NOW THAT THE GOVERNMENT WOULD BE PREPARED TO MAKE A FINANCIAL CONTRIBUTION TO THE SCHEME IF ONLY TO ENSURE THAT SCHEME DOES NOT HAVE REGRESSIVE EFFECTS IN TERMS OF INCOME

DISTRIBUTION. A GOVERNMENT CONTRIBUTION WOULD ALSO UNDERLINE THE

COVERNMENT COMMITMENT TO THE DEVELOPMENT OF SOCIAL WELFARE

FACILITIES IN HONG KONG AND WOULD BE IN LINE WITH WORLD PRECEDENTS

FOR SIMILAR SCHEMES SINCE THE TURN OF THE CENTURY. AT THE VERY LEAST

THERE IS A VERY STRONG ARGUMENT FOR THE GOVERNMENT CONTRIBUTING

AN AMOUNT NOT LESS THAN THE LIKELY CONSEQUENTIAL SAVINGS ON THE PUBLIC ASSISTANCE SCHEME (THIS WOULD HAVE THE ADDITIONAL ADVANTAGE

or

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