CONFIDENTIAL
cations that we have pressed for a Government contribution over and above the costs of administration. Experience in other countries, including the United Kingdom, strongly suggests that a financial contribution from the Government can play a crucial role in getting a social insurance scheme off the ground, and in winning public support for it.
5.
Where do we go from here? You will see that Heppell has suggested various ways in which the problems which you have identified might be surmounted, while retaining the concept of a separate scheme. It would be helpful if you and your experts could now consider whether Heppell's suggestions provide a possible basis for moving forward. As you will see, he ends up by proposing that a further Green Paper might be prepared, setting out the pros and cons of a contributory scheme, whether compulsory or voluntary. I can see the arguments in favour of this course, particularly if Heppell is right in saying that it need not entail significant delay. On the other hand, the publication at this stage of yet another discussion paper, particularly after you had foreshadowed a definite proposal in your Legco speech, might only serve to bolster the doubts that already exist. I should be grateful for your comments.
6.
Heppell has said that he would be very ready to expand on tiis: ideas if that would be helpful. It would be difficult for him to go to Hong Kong for more than a week or two (he has recently been promoted in the DHSS), but he thinks he could arrange for one of his colleagues to pay a more extended visit if you thought it would be useful.
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CONFIDENTIAL
RJT McLaren
Hong Kong and General Department
1
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