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Speech by SLW at annual reception of Hong Kong Federation of Insurers (English only)

     Following is the speech by the Secretary for Labour and Welfare, Mr Matthew Cheung Kin-chung, at the annual reception of the Hong Kong Federation of Insurers (HKFI) tonight (April 16):

Jimmy (Chairman of the HKFI, Mr Jimmy Poon), Bernard (Member of the Executive Council Mr Bernard Chan), K P (Member of the Legislative Council Mr Chan Kin-por), Peter (Chief Executive of the HKFI, Mr Peter Tam), distinguished guests, ladies and gentlemen,

     Good evening. It gives me great pleasure to address this high-powered annual reception and meet so many leaders, experts and stakeholders of the insurance industry.

     The insurance industry has a long history of 170 years in Hong Kong. It has been a key contributor to our economy both in terms of business volume and employment opportunities generated. The total gross premiums of insurance business in 2013 amounted to nearly HK$300 billion. There are some 158 authorised insurers engaging over 80 000 intermediaries providing a wide range of insurance and risk management services. In short, the industry underpins our economy and is an essential component of our financial infrastructure.

     As Secretary for Labour and Welfare, I would like to pay warm tribute to the insurance sector for providing employees' compensation insurance cover for employers to safeguard the statutory rights and benefits of their employees. I am particularly grateful to the Hong Kong Federation of Insurers for responding to the Government's request in launching the Employee's Compensation Insurance Residual Scheme in May 2007. The Residual Scheme has since been functioning effectively as a market of last resort to ensure that employers in high-risk industries can obtain employees' compensation insurance cover.

     We count on the unfailing support and continued co-operation of the Federation in providing affordable and convenient access to employees' compensation insurance cover to keep our economy moving and protect our workforce.

     To assist industries having difficulties taking out employees' compensation insurance, the Employees' Compensation Insurance Residual Scheme Bureau has proactively introduced various new initiatives. These include putting in place a discount and loading mechanism for high-risk industries which makes premium rates adjustable according to factors such as employers' occupational safety and health performance and measures. Companies accredited under the Occupational Safety and Health Star Enterprise - RMAA (repair, maintenance, alteration and addition) Safety Accreditation Scheme, which was jointly launched by the Labour Department and the Occupational Safety and Health Council, are also entitled to special discount. Moreover, short-term insurance policies have been issued to suit the special circumstances of individual industries and employers. This Scheme demonstrates clearly the responsiveness of the Federation in addressing the concerns of users. It also underlines the tripartite co-operation among the insurance sector, Government and employers at large.

     Separately, the insurance industry has also been making sterling contribution to the rehabilitation of injured employees to facilitate their speedy recovery and early return to work.

     Since March 2003, the insurance industry has collaborated with the Labour Department to launch the Voluntary Rehabilitation Programme (VRP) which provides injured employees with an additional channel to receive free rehabilitation services in the private sector. The Programme has forged a multiple-win scenario for employers, employees, the 16 participating insurers as well as society as a whole. As at June 2014, employees of over 13 700 work injury cases had participated in VRP.

     To expedite the rehabilitation of injured workers, most of whom are orthopaedic patients, the Federation has sponsored the Multidisciplinary Orthopaedics Rehabilitation Empowerment Programme, or MORE in short. MORE uses orthopaedic doctors to serve as the main co-ordinator in formulating and implementing patients' rehabilitation plans. Since its inception in mid-2011, MORE has achieved encouraging results. Compared to those with similar work injuries, all the 183 participating patients were able to return to work earlier (7.6 months on average as against 13.7 months in general), received medical assessment referrals earlier and had shorter sick leave. This is yet another shining example of the Federation's good work.

     Let me now turn to an issue close to the hearts of many and that is retirement protection. Retirement protection is a highly important social issue in the context of Hong Kong's rapidly ageing population. The Government will launch a public consultation on the future development of retirement protection towards the end of this year. In exploring the way ahead on this crucially important and contentious issue, we must fully consider the adequacy, sustainability, affordability and robustness of various policy options. The current-term Government agrees that protection for our needy senior citizens after retirement should be improved. To demonstrate our determination and commitment, we have earmarked $50 billion to provide for future needs. The Commission on Poverty is currently devising the framework and setting out the details for the public consultation.

     I would also like to take this opportunity to briefly update you on two issues of current interest, namely Statutory Minimum Wage and Standard Working Hours. The hourly rate of Statutory Minimum Wage will go up from the existing $30 to $32.50, up by 8.3 per cent, on May 1 (Labour Day). Since its implementation in May 2011, Statutory Minimum Wage has proved an effective policy tool in easing working poverty and serving as an incentive for work. As for Standard Working Hours, the Standard Working Hours Committee is pressing ahead with its task of carefully exploring the way forward on Hong Kong's working hour policy. It will submit its recommendations to the Chief Executive in the first quarter of next year. Standard Working Hours is a highly complex and controversial issue and has far-reaching implications for the economy, labour market and society. It calls for prudent handling.

     Let me conclude by making two further but important points. First, the Government attaches great importance to safeguarding the statutory labour rights of Hong Kong's workforce. Our policy is to improve employees' protection progressively at a pace commensurate with the socio-economic development of Hong Kong and, more importantly, striking a reasonable balance between the affordability of employers and the interests of employees.

     Second, whilst government spending on social welfare has been rising steadily in recent years and will hit a hefty $59.6 billion in 2015-16, representing 18.4 per cent of the Government's annual recurrent expenditure and just after education, let me stress that Hong Kong will not go down the route of a welfare city. It is true that the current-term Government is determined to tackle poverty and enhance elderly care in preparation for a fast ageing society. And we believe that we should and can do more to build a caring, compassionate and fair society. But we will not go for any populist moves. We will adhere to our well-tried and cardinal philosophy that limited public resources must be targeted at helping the most needy in our society. We will strike an appropriate balance between responsiveness to community needs and responsibility for prudent public spending.

     In building a truly caring community, the Government cannot go alone. The business community also has an important role to play. It is encouraging to note that social responsibility forms an integral part of the Federation's corporate culture. Over the years, the Federation has provided financial support to non-governmental organisations or professional bodies for projects and events relating to insurance. In recognition of its contribution as a good corporate social citizen, the Federation has been awarded the Caring Organisation status by the Hong Kong Council of Social Service for the eighth consecutive year.

     On this note, I wish you good health and every success in the years ahead. Thank you.

Ends/Thursday, April 16, 2015
Issued at HKT 19:29


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