TNAG-0789-FCO40-993-Development-of-social-policy-in-Hong-Kong-proposed-contribut-1978 — Page 55

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which the Hong Kong Government have in mind are those mentioned

in paragraphs 5 to 7 of Hong Kong telegram no 81 to Peking of 29 June, and in particular the first. In brief the argument is that if people are made to contribute to a scheme involving benefits which would not become payable until after 1997 (as would be the case with retirement benefits for workers under 40) they would be bound to start asking awkward questions which the Government would be in no position to answer. In short the inclusion of retirement benefits in a compulsory scheme could spark off a premature debate over the future of Hong Kong with damaging effects on confidence.

7. Hong Kong telno 81 to Peking also raised the possibility that the Chinese Government might react adversely to the introduction of a compulsory scheme (on the ground that we were taking too much for granted) or that local communist organisations and unions would refuse to co-operate. But the Governor himself thought that

these risks were outweighed by the administrative and other advan- tages, and neither we nor H M Ambassador in Peking (Peking telno 40 to Hong Kong) thought it likely that the Chinese Government would wish to rock the boat in the present climate of relations.

8.

There is some validity in the objection mentioned in paragraph 6 above. But the idea of death and retirement benefits has already been put forward in the Green Paper (admittedly in the context of a scheme that was only semi-compulsory) without creating this sort of a problem, and the danger of damaging speculation should not be significantly greater simply because the scheme is now to become fully compulsory. Indeed the reverse could be argued that to omit the retirement benefit after originally including it in the outline proposals could be interpreted as a lack of Government confidence in the future of Hong Kong, and could therefore lead to even more awkward questions being asked. It is significant that in the public opinion survey carried out by the University of Hong Kong, a retirement benefit emerged as the second highest priority, and over 70% of employees thought that such a benefit

Finally, it is important to remember that the

was necessary.

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