Hong Kong Director of Social Welfare Carrie Lam Cheng Yuet-ngor has long dazzled officials and journalists with her skill in handling figures. 'I am not that good at mathematics, but I am not afraid of numbers,'' she says. The highly organised official often impresses the public, too, as she explains government policies - such as cuts in welfare payments - by referring to dozens of sets of numbers without even a glance at any script or file. Her office in Wan Chai looks like a small library, with dozens of files and reference books displayed neatly around her desk. She usually holds up a large folder when she is interviewed, and then draws statistics from it when needed. 'I just like things to be organised,' she said. Perhaps such a character trait is linked to her career background. Before becoming welfare chief nearly three years ago, Mrs Lam worked for the Finance Bureau for more than six years. She was a deputy secretary for treasury between 1996 and 2000, a position overseeing all spending by every government department. This background led some people, especially social workers, to say that she was not suitable to be the director of social welfare - a post dealing with the needy. At the time of her appointment, there were fears that this move was aimed at tightening the government welfare budget. As expected, Mrs Lam introduced several reforms in the welfare sector, including changes to the funding of welfare groups, a bidding scheme for operators of homes for the elderly and, most controversially, an 11.1 per cent cut in Comprehensive Social Security Assistance payments. Those cuts took effect yesterday. 'I have no emotion towards money,' she said. 'My philosophy is to put money to good use. It is not about [being] expensive or cheap, but whether the goods and services are value for money.'' She says it is always difficult to be a welfare chief with a tight budget, but points out that in reality money is always limited. 'It is more challenging when money is pouring in and you are asked to spend it. I do not really like to do that. I have actually seen it before,' she said. 'The past three years have not been particularly difficult in terms of money. When compared with the private sector, we have only cut 6.8 per cent of spending in the past years. And ... our budget has still grown as a whole in the past three years. Welfare services are still growing in Hong Kong.' Such arguments are not well received among welfare groups. There was strong criticism from the welfare sector when Mrs Lam defended the government's plan to cut welfare payments in line with deflation. Social workers were adamant: the poorest people in the community should not be subject to the reduction. To Mrs Lam, recent years have witnessed a process of adjustment and adaptation in dealing with non-governmental organisations. 'I had worked for 6.5 years in the Finance Bureau and I worked with people like [Chief Secretary] Donald Tsang Yam-kuen and Kwong Ki-chi [former secretary for the treasury], who are used to straight talk. 'But in the welfare sector, everything needs to be packaged and polished. Everything has to be more discreet, more indirect so as not to hurt their feelings. 'It is quite ironic, when people say people in the welfare sector are compassionate people who look after others' feelings and interests, when in fact they, too, are the group who needs to be pampered and cared for. 'They may not be able to accept some very blunt statements and remarks. 'For example, if I want to point out their inefficiency, probably I have to point it out in a way that wouldn't hurt their feelings,' she said. Mrs Lam picks up an article from her folder, a South China Morning Post interview with her three years ago when she was still a finance bureau official, voicing strong views on welfare spending. Criticising extensive bureaucracy and calling for means tests for payouts to the elderly, she warned then that Hong Kong faced 'going down the road to a welfare state and higher taxes'. 'The language that I used was rather blunt. I would rather not use such kind of language now,' she says. The cut in welfare payments has met strong resistance in the community. Hundreds of elderly people have repeatedly protested outside the Legislative Council and the Social Welfare Department office in Wan Chai, with some calling for her to resign. Mrs Lam recalled that meetings and discussions with some radical social workers on the plan were 'totally frustrating'. The activists dismissed the government's arguments that the needy had been overpaid due to deflation, and called for a new study to be conducted to determine the basic need of recipients. Finally Mrs Lam abandoned any further talks. She wrote, in a column on the welfare department's website in March, that she would take full responsibility for aborting efforts to gain the support of welfare groups over cuts in subsidies. Even though she said afterwards that she would not resign, the move triggered another debate, this time a political one, on why a civil servant would offer to take full responsibility for her work, while some ministers did not do so under the ministerial system. Mrs Lam said the heated response to her column, which was originally a letter to non-governmental organisations aimed at improving the relationship, was rather unexpected. She said it would be 'rather scary' if no civil servant was prepared to take responsibility for their work. 'I do not think I have been deserted by the community in taking a rather tough position on the welfare cuts issue. I have had a lot of support from the community and the community is on our side. 'In fact, I wrote the column to mend the relationship with the welfare sector. I have told my staff that we have won the arguments, and we do not have to win their feelings.' Mrs Lam, with Director of Health Margaret Chan Fung Fu-chun, Permanent Secretary for Education Fanny Law Fan Chiu-fun and Permanent Secretary for Home Affairs Shelly Lee Lai-kuen, have been praised for setting up the We Care Education Fund, aimed at helping the 60-plus children who lost their parents in the Sars outbreak. The fund has raised more than $55 million. Mrs Lam said she was just doing her job. 'I came to realise that the director of social welfare also has a social function to take care of such children. And I have to perform such a function on a grand scale.' And she said she was ready for more difficult times, and probably has more battles ahead. The government is planning to bring in a means test for the residential care system for the elderly. Introducing such a means test is likely to meet strong resistance in the community. And welfare payments are likely to be cut further, as deflation continues in Hong Kong. 'The past three years were not particularly difficult. But I think the next few years will be,' she said.