TNAG-2633-FCO40-3824-Future-of-Hong-Kong-nationality-British-Nationality-(Hong-K-1992 — Page 113

VERMENT HOUSE HUNG KUNG.

MUN 09 NUV 92 11IC

42

CONFIDENTIAL

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6.

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It is noted that in the earnings scale subsequently drawn up, managers and administrators earning less than $200,000 per year welt allocated the same number of points for each year's relevant experience. They were considered to be performing very marginal managerial or administrative duties, to such an extent that there was no need to differentiate the quality of their experience. The differentiating effect of the scale is more marked in the middle income ranges $200,000 - 250,000 (2 levels of points) and to a lesser extent $250,000 400,000 (3 levels), as it was envisaged that the majority of applicants would fall within these income ranges. Further beyond, the rate of increase in experience points per dollar income declines until it becomes zero at $2 million. In the absence of any meaningful statistics on the income profiles of managers and administrators in the private sector, it was then generally believed that business owners as a group would earn substantially more than salaried executives. It was therefore decided that the scale should not be pitched too high and that it should not be linear as business owners in either case would have an undue advantage over salaried managers or administrators.

Proposed arrangements for the second phase

7.

The arguments in para 4 above are valid it is indeed difficult to measure the quality of experience of managers, and it remains valid for the second phase that an applicant's income level is a reasonable indicator of the degree of his success in the profession. It is therefore recommended that experience points for the managers and administrators group should continue to take account of both the length of experience and income level of the applicants.

CONFIDENTIAL