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Philip Bowring

WE ALL KNOW statistics often lie. However, there's another old newspaper adage: 'Never let the facts get in the way of a good story.'

So let us bring facts to bear on notions being peddled around Hong Kong.

There has been lots of talk recently to the effect that one reason for rising unemployment is that families can make more money living off social security than by working. The taxpayer, we are being told, is supporting lots of layabouts, particularly unskilled new arrivals from the mainland.

It is particularly nauseating to hear these sentiments from the mouths of Hong Kong's overpaid, under-challenged, jobs-for-life senior bureaucrats.

Director of Social Welfare Carrie Lam Cheng Yuet-ngor suggests that it may be time to cut back payments because a family of four gets $10,010, including rent allowance, which, her department tells us, is 1.4 times the average wage of an unskilled worker.

Back to that in a moment. But firstly, let us look at the actual data for Comprehensive Social Security Assistance (CSSA) spending and see how it matches unemployment. If bludging on the dole was a significant phenomenon, and was pushing up the unemployment rate, one would expect that payments would be rising as fast or faster than unemployment.

But what do the government statistics tell us? Firstly, that as of April - the latest month for which figures are available - the total number of CSSA recipients of all kinds was 250,000. But of these, 174,000 were the old and disabled. The number of unemployment benefit recipients was 33,100, or only 13 per cent of the total, despite having risen by 40 per cent since a year previously. Secondly, although the number of unemployment benefit recipients rose dramatically in percentage terms over that year, the total monthly CSSA payout rose only 14 per cent. One would expect the unemployed, who mostly have families, to get higher benefits than the elderly. But even now, unemployment payments represent only a small proportion of CSSA spending.

Thirdly, only a small minority of the unemployed get this CSSA benefit.

The 33,100 in April compares with unemployment during the February-April period of 245,000. The ratio of benefit recipients to total unemployment fell from 15 per cent to 12 per cent. Clearly, CSSA is used as a last resort.

As for the claim that recipients get more than the employed, that is also absurd. The average household of four has two income earners. The median wage is $10,000 a month, the median household income $17,000 and average household size 3.2. Thus the CSSA 'excessive' support level per head ($2,502) is less than half the median household income per head ($5,300) and puts recipients at best in the same income bracket as the lowest paid 10 per cent of workers.

Perhaps Ms Lam should study the government's own data. It is alarming to see someone in her position suggest the unemployed are getting too much and have become an excessive burden on the government. As it is, the old and infirm remain the major recipients of a CSSA budget which is anyway only eight per cent of total government spending.

But clearly the government now wants to cut back payments to the most disadvantaged to help pay for such 'essentials' as its latest subsidy to a private company, Disney, via the MTRC, the inflated salaries of new 'ministers', or the new subsidies that the government now wants to hand out to favoured businessmen.

Another notion doing the rounds is that tycoon Li Ka-shing is particularly devoted to investing in Hong Kong.

I have no idea where Mr Li has been investing the cash flow from his existing fortune. But one can certainly check the geographical direction of investment of Mr Li's major listed and interrelated companies.

Near the bottom of the Li corporate tree is Hong Kong Electric. Last week, HK Electric and CK Infrastructure announced they were paying A$1.4 billion (HK$6.2 billion) for another Australian power venture. This is their third Australian purchase and will mean that about a third of Electric's assets will be in Australia, compared with nil in 1997. Cash from Electric feeds into CK Infrastructure, whose principal asset it is. Electric represented 61 per cent of CKI's 2001 profit. CKI is a subsidiary of Hutchison, which has been Mr Li's main vehicle for overseas investment. The expansion of Hutchison's ports business has been especially far-reaching. In addition to the low-cost, nearby mainland ports, last year alone Hutchison acquired eight port operations in six countries.

Hong Kong's contribution to Hutchison's turnover has fallen from 61 per cent in 1997 to 47 per cent in 2001 and contribution to earnings (before interest and tax) from 69 per cent to 45 per cent.

Top-of-the-Li-tree Cheung Kong is both a holding company for the above assets and a major property development company in its own right. The gargantuan profit margins that Cheung Kong used to generate on property development in the age of inflation and artificial land shortages have withered. Cheung Kong at least seems to have few illusions and compared with 1997 now has an increased focus on the mainland, and elsewhere.

All in all, the Li public empire appears markedly less focused on Hong Kong than it was in 1997. I am not suggesting there is anything wrong with this. Quite the opposite.

Mr Li and his managers have shown great skill in building up a global ports business using, among other things, cash generated in Hong Kong. They have taken advantage of power privatisation in Australia. They have skilfully played the treacherous global telecoms market while others have been losing their shirts.

This should all be to the good of outside investors. But let us get the facts straight about how much investment has gone into Hong Kong compared with how much has gone elsewhere.

Philip Bowring is a Hong Kong-based journalist and commentator

bowring@attglobal.net



Bringing facts to bear on the 'army of dole layabouts'