FCO_49_622_PLANNING_PAPER_ON_HONG_KONG_1976 — Page 56

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In spite of the improvements of recent years, there are weaknesses or gaps in the social security system, though

to some extent these are attributable to the absence of any

contributory element. There is no direct provision for

unemployment benefit (though in Asia such benefits are only

paid in Japan, and in Hong Kong the requirement is to some extent met by public assistance). Pensions are small and are available only to persons of 75 and over; though medical

treatment is available without contributions, sickness benefit

is an employer's liability and does not extend beyond 24 days (though public assistance would be available). Similarly there

is no pension for widows as such, though they are eligible

for public assistance. The full details of the current scheme

are in Annex D. There appear to be two alternatives. The first

is to build on the present scheme whose administration is now

well established, is working well, and is technically capable of considerable modification or expansion if such are considered

desirable. By such means a complete system of social security

based on need, however defined, could be established. Alter-

natively a new system based on compulsory contributions by

employers and employees could be substituted within the form

of a Provident Fund or along UK lines. The objections to either

of the latter concepts is that with the uncertain future of Hong

Kong the population would resent deductions from their disposable income now in return for a promise of financial security at a later date. There is also the subsidiary difficulty of the

effect on costs that the employers' contributions might have. The Governor considers that the difficulties of gaining

acceptance for such a scheme are too great, and the benefits it could confer before the mid 80's too small in comparison

to those that could be made available under the existing scheme to justify its introduction. The most useful social aspect

of the Singapore Provident Fund has been the facilities it

provides for home purchase; the Hong Kong Government accepts

that provision of such facilities for the low income bracket is

desirable and is at present working out a scheme.

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