THERE is a danger of a huge manpower shortage in the security industry if new Government proposals force thousands of elderly security guards to retire. The Security Association believes as many as 40,000 employees, most guarding residential and commercial premises, may be forced to retire from an industry where the average age is between 50 and 60 years old because of the provisions in the draft Security and Guarding Services Bill revealed in the South China Morning Post on Monday. The bill could come into effect in 1995. Under the proposed bill, security guards who are in danger of losing their jobs are those aged over 60. Under the recommendations, prospective guards would have to apply for permits to work and security companies would have to be licensed. The criteria for issuing licences would be worked out by a future Security and Guarding Services Industry Authority envisaged by the bill. The criteria is expected to include age and health requirements which will lead to cuts in the number of older staff. Replacing retired guards presents difficulties for the security industry in Hong Kong because of full employment and the industry's extremely low wages. ''This is the big question: where are the guards going to come from?'' asked David Ng, personnel director at Securicor (Hong Kong) Limited which has guards protecting a number of residential and commercial properties in the territory. Mr Ng's was supported by Paul Ko, senior security officer at Urban Property Management. ''We've got a big problem . . . we have to be economical . . . if you can't pay much how can you get better younger guys?'' he asked. Hong Kong Association of Property Managers' chairman Stephen Yeung supports the need for younger guards, but said: ''Acceptance of the costs by the public is crucial.'' Mr Yeung said consumers must be educated to realise that the higher costs would be commensurate with higher levels of service. The moves towards introducing minimum standards for the security industry contained within the draft Security and Guarding Services Bill are supported by the Security Association although it, too, expresses concern about the problems involved in employing new staff. Security Association secretary Peter Gray said: ''It is unlikely that the introduction of foreign labour would assist in any way, as such schemes have so far insisted on higher minimum wages than are currently paid to Hong Kong personnel.'' And although Securicor employs Gurkha guards, Mr Yueng said that Gurkhas were suited to guarding commercial buildings, but not housing estates because they did not speak Cantonese. Both the Security Association and the Hong Kong Association of Property Managers believed age and health restrictions should be phased in gradually to avoid a manpower crisis. But Mr Ko believed age did not necessarily matter. ''I want a physically fit guy - that will do,'' he said. At Urban Property Management, 50 of the 270 guards are more than 50 years old. Mr Ko said many younger people lacked the necessary experience for security work. The Government's proposals present no problems for Swire Properties because all its staff, including security guards, retire at 60. Swire's public relations manager, Maisie Shun-wah, said the draft bill ''matches our existing policy'' and would raise standards.