coverage and considered that these proposals should not preclude the introduction of a more comprehensive scheme in future. While the Employers' Federation of Hong Kong was also in support of the proposals, they were somewhat concerned about the possible effect on small employers.
Financial Implications
24
The additional administrative costs of a scheme on the above lines would be minimal insofar as the Labour Department and the Labour Tribunal are concerned, assuming that machinery would in any case have been established to monitor the liabilities of employers,
25
As regards cash payments on death benefits under the Special Needs Allowance Scheme, it is difficult to estimate the numbers who might qualify. But assuming 10% of the number of deaths in any one year will require assistance, the commitment for Government will be about $7.5M based on the figure of approximately 25,000 deaths in 1980. The staff needed by the Social Welfare Department to handle these 2, 500 cases (i.e. 10% of 25,000 deaths) might cost $0.1M a year.
Economic Implications
26
The proposed extension of paid sickness benefit in the form of a higher maximum for the number of days for which sick leave could be accumulated may create a disincentive on the part of workers to move between jobs, thus restricting labour mobility. But, overall, this effect if unlikely to be serious because the most important factors which lead to workers moving between jobs are financial, environmental and personal. However, for the less healthy workers, this particular disincentive effect may be more significant. The same would apply to old-aged workers as a consequence of the proposed death grant which has a qualifying period of one year. Nevertheless, this argument is a fairly theoretical one. In any case, the benefits the proposals would bring are of overriding importance. What would be undesirable, however, is that the proposed death grant may lead to discrimination against the employment of the old-aged.
Public Reaction
27
The general public will welcome the proposals although the voluntary sector and organisations such as the Christian Industrial Committee may complain that they do not go far enough. The level of the death grant will likely be criticised as being on the low side and there may well be some revised lobbying for a retirement benefits scheme.
G.S. 166
CONFIDENTIAL #2
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