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Chris Yeung

CHINA yesterday said the increase in Hong Kong's welfare spending over the past five years was a recipe for disaster.

There had been a massive surge in spending and the trend had to be checked, said Chen Zuo'er, head of a mainland budget team working under the Joint Liaison Group.

'It's like a Formula One car which is going to crash and kill all six million people in Hong Kong,' he said in Beijing.

The criticism drew an angry response from Governor Chris Patten, who said how Hong Kong managed its finances was none of China's business.

'People should leave us to drive our own car and I'm sure that they'll be able to get some good tips from us as we continue to cruise along the road,' he said.

Mr Chen, speaking after two days of talks on budgetary issues, said welfare spending had surged by 66.5 per cent in real terms over the past five years.

One government official had vowed welfare would reach 'first world' level within five years, he said.

'We disagree with the policy of having a larger deficit.

'Since the arrival of this governor, welfare spending has suddenly become a Formula One car. If it runs at the present speed, for not too long, it will crash and kill. On board this car are six million people,' said Mr Chen.

It was not difficult to understand the approach of caring only for the present and aiming at 'doing all the good things in a single day', he said.

 Plans to 'make everyone happy with claptrap' were either immature political moves or a ploy with bad motives, the budget team chief said.

 His Hong Kong counterpart, Secretary for the Treasury Kwong Ki-chi, replied that Mr Chen's remarks were 'a bit too much'.

  The administration had no motive other than to address the needs of the community, he said.

 Mr Patten said: 'I think everybody should stick to what they know about and not get involved in areas where they are not particularly expert.

 'Of course, the question of how much Hong Kong spends on its welfare and social programmes will have nothing to do with any Chinese official after 1997.

 'It's entirely a matter for the people of Hong Kong and for those who govern them and those who represent them,' he said.

 Citing the new report that said Hong Kong was the world's most free economy, Mr Patten said: 'We are the best car drivers in the world.'  A government source said Mr Patten was 'worried and angry' with the remarks.

 They followed the claim by Preliminary Working Committee member Sir Sze-yuen Chung that there would be a shadow government prior to the 1997 changeover.

 The source said: 'It's a clear breach and threat to Hong Kong's autonomy.'  He said Mr Chen's warning would give rise to fears that Beijing would soon come up with welfare items that would be cut after 1997.

  Unionists condemned Mr Chen's remarks as showing 'ignorance of the plight' of the poor.

 Legislators said more should be spent on welfare.

 Financial Secretary Donald Tsang Yam-kuen said the Government had always stuck to the principle of keeping overall expenditure within the rate of economic growth.

 '. . . but within that discipline, the Government has to allow for individual programmes - some to spend more and some to spend less,' he said.

 It was natural and responsible of the Government to spend more over the last few years on social, welfare and educational programmes, he said.

 Secretary for Health and Welfare Katherine Fok Lo Shiu-ching said help was provided to those in genuine need.

 The Government would spend $14.9 billion on social welfare this year - a 24 per cent increase in real terms over last year.

 'But we are doing no more than we can afford to do in line with the prudent budgetary guidelines. We shall continue to hold fast to the rule that over time public expenditure grows no faster than the economy as a whole,' Mrs Fok said.

 Director of Social Welfare Ian Strachan said: 'We were reflecting the aspirations of the Hong Kong people for a social welfare system which reflects our first world economic status.' 



China in attack on welfare spending