TNAG-1894-FCO40-2688-Visit-by-Francis-Maude--Minister-of-State-for-Foreign-and-Co-1989 — Page 50

TIMAAH (7)

CONFIDENTIAL

BASIC LAW PROVISIONS FOR PROTECTING PENSIONS

HKSARG IS REQUIRED TO BALANCE ITS BUDGET: IN ORDER TO BALANCE BUDGET

MIGHT CUT EXPENDITURE. THEREFORE MIGHT STOP PAYING OUT PENSIONS.

No evidence to indicate that future SAR Government will not take

its responsibilities towards pensioners seriously. On the contrary, Article 101 sets out those responsibilities clearly.

NATIONAL PEOPLE'S CONGRESS HAS AUTHORITY TO AMEND THE BASIC LAW.

UNLESS SOME ASSURANCE GIVEN THAT THE ARTICLE ON PENSIONS CANNOT BE

AMENDED, FUTURE SAR GOVERNMENT COULD STOP PAYING PENSIONS

We have over the past few months since publication of the second

draft of the Basic Law scrutinized the draft very closely. We have

looked at all the relevant sections carefully and believe that there

are no grounds for concern on the payment of pensions after 1997.

In times when public expenditure may have to be curtailed for

whatever reasons, responsibility for payment of pensions will still

fall upon the SAR Government.

CONFIDENTIAL