CONFIDENTIAL
XCC(93)171
FINANCIAL AND STAFFING IMPLICATIONS
28
Some additonal staff will be required to undertake the in-depth study. The cost would be about $3 million a year. Another $3 million should be reserved for engaging consultants. This expenditure will be met from the Secretary for Education and Manpower's global allocation.
ECONOMIC IMPLICATIONS
29
There would be no adverse economic implications if we are to continue with the voluntary approach in the provision of retirement schemes. The economic implications of a contributory old age pension system will be examined as part of the future deliberations.
PUBLIC CONSULTATION
30
This paper has already taken into account a wide range of public views on this subject expressed over the last year since the Consultation Paper was published in October 1992.
CHINA DIMENSION
31
Since we will not be changing existing Government policy there is no need to consult the Chinese. If Government policy does change, as a consequence of studying the old age pension system for example, this position would need to be reviewed.
PUBLIC REACTION
32
The announcement on the way forward will be highly controversial and will generate a heated debate. The lower income group, which stands to benefit most from a universal pension system, is likely to welcome it. They will be supported by trade unions and welfare groups. The middle class and the professionals, many of whom would have been covered by some form of provident fund or pension scheme, will see this as an additional burden, since there will be no provisions for opting out. Many civil servants will side with this group. There will also be criticism of the additional "payroll tax”, particularly because this group is already bearing the brunt of salaries tax contributions. The fact that contributions are likely to go up in time will add fuel to this criticism.
Executive Council
No comments yet.
Private notes are available after approval.