Chief Executive Donald Tsang urged business leaders yesterday to show corporate responsibility and pay a minimum wage to unskilled workers by following the government's example.

Tsang made the appeal while addressing about 2,000 businessmen and company executives at a joint chambers of commerce luncheon at the Hong Kong Convention and Exhibition Centre.

"I certainly hope that situation doesn't emerge," Tsang said, referring to the possibility of having to adjust the tax structure should the number of welfare recipients increase, and hoped that the benefits of economic recovery could filter down to lower-wage groups.

"The government has taken the lead by ensuring that all of its service contractors pay wages no lower than that of the average market level to non-skilled workers. We have also asked all public and subsidized organizations and schools to follow the example," he said.

"In the spirit of corporate responsibility, I make a personal appeal today to the private sector to do the same," Tsang said.

In his Policy Address, delivered last week, the chief executive said that some employees' livelihoods were yet to improve despite the economic recovery. He reckoned that protecting labour rights and promoting good labour relations were essential to a harmonious society.

Though the community is yet to reach a consensus on minimum wages, Tsang announced that the government had already taken the lead to introduce such a practice in its contracts and promoted it to other public and subsidized bodies and schools.

At yesterday's luncheon, he explained why it would be in the business sector's interest to follow the government.

Risks of too low wages

Too low wages could lead to a situation where "decent men and women trying to eke out a living would simply give up working" if welfare payments were more attractive than the wages they could earn, he warned.

"Then, we'd have an entirely different situation, where welfare payments would replace wages rather than provide a stop-gap safety net for people in between jobs. Then, we'd see the welfare bill beginning to escalate," he said.

"Then, the government will need to look closely at its revenue base and allocation of resources. The bottom line in that regard is whether we have to adjust our tax structure to accommodate an escalating welfare bill. That's not what the business community wants to see," he said.

Commenting on the minimum wage review by the Labour Advisory Board, Tsang said the starting point for the review was to ensure that no policy change harmed the overall employment situation. But that wouldn't be an option if a minimum wage turned more people jobless.

Referring to an administrative worry, he said: "There is the concern within the workforce - and within the government - that the fruits of the economic recovery are not filtering down to the unskilled workers. At the same time, the recovery is lifting living standards and making it even more difficult for those earning a bare, basic wage to make both ends meet," he said.

Tsang said Hong Kong was entering a new phase now that it had become economically, politically and socially more stable.

The government will do more to improve the living environment, especially the quality of air and water, so that more big and small companies are drawn to Hong Kong and create more jobs for more people.

He urged politically ambitious business leaders to participate in politics and take part in running Hong Kong's affairs. Greater involvement by all sectors in Hong Kong's affairs was important for better governance, he said, eager to see a wider spectrum of people playing a role in the government's advisory machinery.

"If we expand our scope of contacts - for example, through grassroots organizations, business associations, district councils and statutory advisory bodies - we can gain new perspectives on myriad topics of concern to the public," he said.

"If we can make better use of the huge pool of specialized knowledge in the community, we can develop policies that dovetail better with society's needs. As a result, more people will be part of the decision-making process."

However, he assured the business leaders that the government would not do anything to negate Hong Kong's competitiveness.

When a member of the audience asked if the administration would review the civil service pay structure to make the civil servants more responsive, Tsang said it was not his administration's priority to review the pay structure, for that would take a long time and have lots of implications.

(HK Edition 10/18/2005 page2)