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Welfare cuts are not set by pure conjecture

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Even at the best of times, cutting welfare would be a hugely unpopular move by any government.

So is the Hong Kong government out of its mind in pressing ahead with an 11.1 per cent cut in social security payment rates when unemployment is at a record high of 7.8 per cent, and when its head of government has a popularity rating of just over 40 per cent?

Surprisingly, the answer is no. To be sure, there are rumblings, but hardly anyone is in revolt. In fact, the administration of Tung Chee-hwa may have earned a few kudos for persisting with such a 'heartless' measure.

After more than 50 months of deflation, the cost of living has fallen sharply. As incomes dropped across the board, so has the price of daily necessities. The downward adjustment of welfare payments will only bring their buying power back to original levels. The cuts are substantial but they are not set by pure conjecture. Instead, they are determined according to a formula that reflects the spending needs of low-income families.

Critics may find holes in the formula. But until there are convincing arguments to change it, we should abide by the results of objective calculations rather than allow our hearts to rule our heads. Hong Kong is not a welfare state. The community takes pride in its spirit of self-reliance. We have a low-tax regime that encourages hard work and entrepreneurship.

At the same time, we provide a social safety net for those who are unable to take care of themselves. But we cannot afford a safety net that has become a magnet for those who find it pays to go on welfare. Before the rates were adjusted downward, some people found they would be better off on welfare than finding a job.

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