WELFARE spending will rise 14.7 per cent next year to $16.5 billion, the Government said yesterday. In announcing draft expenditure estimates for the next financial year, Secretary for the Treasury Kwong Ki-chi admitted welfare spending was the biggest rise, but maintained that was what the public wanted. Whether China will see it that way, however, remains to be seen. There was no mainland comment on the $3.2 billion rise last night, but Beijing officials had previously warned against soaring welfare spending. Mr Kwong said total expenditure for 1996/97 would be $227.6 billion, a 7.6 per cent increase, but maintained the Government had stuck to its prudent public finance management principles while meeting the needs of society. 'On social welfare spending we listened to views expressed by all sectors before according our spending priority,' he said, pointing out that China had been closely consulted and had received an advance copy of the estimates. 'The important consideration is not the growth in individual policy areas but the overall growth in government expenditure. 'The figures will demonstrate that we are adhering strictly to our fundamental budgetary principle of strict control,' Mr Kwong said. The head of China's discussion team on budget negotiations, Chen Zuo'er, recently warned against a surge in welfare spending, likening it to a racing car running out of control and killing all on board. Mr Kwong refused yesterday to say whether he had adjusted his spending plans in view of Beijing's concerns. Yesterday's estimates are part of the Budget to be announced by Financial Secretary Donald Tsang Yam-kuen in the Legislative Council next Wednesday. Members were sharply divided on the plan last night. Some insisted welfare spending was still so low they might vote the Budget down, while those from the business community said the increase did not smack of financial prudence on the Government's part. Governor Chris Patten is confident the community will be delighted with increased spending for the elderly, sick and the disabled. 'It shows the Government listens to the public and legislators and acts. It also shows we have a strong economy which we are determined to keep strong,' said Mr Patten. Government figures showed recurrent expenditure growth in real terms on social welfare in the past five years was 72 per cent; health, 48 per cent; and education, 32 per cent. According to the estimates, total public expenditure will go up from $203.9 billion to $227.6 billion, which represents 18 per cent of gross domestic product. Total government spending is put at $183.7 billion, of which $137.9 billion is for recurrent expenses on existing and new services, and the remaining $45.8 billion on capital projects. The growth of total government spending in real terms when compared with past years is 5.9 per cent. Last year's rate of increase was 5.6 per cent. Total public expenditure will represent an increase of 7.6 per cent. Mr Kwong insisted the growth in government expenditure did not exceed the trend growth rate of the economy. The forecast trend growth rate was five per cent in real terms. The Government is expected to fetch $36.5 billion in land premiums, down from the revised estimate of $42.8 billion last year. Mr Kwong said land revenues depended on several variables. The estimate did not imply a gloomy assessment of the market. MAIN POINTS AT-A-GLANCE Total government expenditure up 5.6 per cent to $183.7 billion; Total public expenditure up 7.6 per cent to $227.6 billion; Recurrent expenses up 6.3 per cent; Social welfare spending up 14.7 per cent to $16.5 billion; Education spending up 4.3 per cent to $34.5 billion; Land premiums down 17 per cent to $36.5 billion.