After seeing the recent financial crises in European countries such as Greece and Italy, some local commentators have warned against over-spending on welfare. However, the implication that Hong Kong will face similar problems if it further expands social welfare spending is extremely misleading.

Our level of social spending in Hong Kong stands at only about 30% of these European countries. On average, the 34 developed countries that are members of the Organisation for Economic Co-operation and Development spent 19.2% of their GDP on housing, health, old age, employment and training, and family services. Greece spent 21% and Italy 25%. In 2010/11, Hong Kong’s government spent HK$98.9 billion, or 5.8% of GDP, on these policy areas.

Our problem is not over-spending – it is the inadequacy of basic services and support to our needy and vulnerable citizens. The government distributed over HK$180 billion in well-publicised handouts in the last four years, resulting in no significant impact on economic or social development and no improvement in the levels of basic services. 《.... More》