After seeing the recent financial crises in European countries such as Greece and Italy, some local commentators have warned against overspending on welfare. However, the implication that Hong Kong will face similar problems if it further expands social welfare spending is extremely misleading.
Our level of social spending in Hong Kong stands at only about 30 per cent of the spending of these European countries. On average, the 34 developed countries that are members of the Organisation for Economic Co-operation and Development spent 19.2per cent of their gross domestic product on housing, health, old age, employment and training, and family services. Greece spent 21per cent and Italy 25per cent. In 2010-11, Hong Kong's government spent HK$98.9 billion, or 5.8per cent of GDP, on these policy areas.
Our problem is not overspending - it is the inadequacy of basic services and support to our needy and vulnerable citizens. The government has distributed over HK$180 billion in well-publicised handouts in the past four years, resulting in no significant impact on economic or social development and no improvement in the levels of basic services.
And those levels are inadequate. In health, many elderly people start queuing for public dental services at 5am, while a teenager with mental health problems has to wait more than a year before getting a first appointment with a public outpatient psychiatric clinic. In housing, about 13per cent of general applicants for public rental housing have to wait more than the official pledge of three years before getting their first allocation, while working-age single people are not covered by the pledge at all.
The shortcomings verge on inhumanity. On average, more than 5,000 frail elderly people pass away every year while awaiting appropriate residential services, and some severely mentally handicapped people have to wait for more than 10 years in order to get a place in a residential home. Even more ridiculous, many disabled children have to wait more than two years to get into a service that is designed for children up to two years old.
For less than HK$3 billion in annual recurrent expenses, the government could provide an additional 14,000 residential places for elderly and disabled people and 8,000 places in day services for this group of people, including disabled children. Such welfare expansion would only increase our total public social spending by less than 0.2 percentage points of GDP, from 5.8per cent to 6per cent.