Opinion | Hong Kong is spending more money than ever on public services, but it must learn to use it wisely
Government expenditure on welfare, education and health care has risen over the years, but without sufficient oversight on whether such spending is useful, the money will not have the intended impact
The Hong Kong government’s public expenditure as a percentage of gross domestic product averaged 15.7 per cent during the last 12 financial years of the colonial government. It increased to 18.16 per cent during the tenure of Donald Tsang Yam-kuen, while the figure for both the Tung Chee-hwa and Leung Chun-ying administrations was a slightly higher 20 per cent.
The current government spent an average of 20.9 per cent in the first and second financial year; for the third, from 2019 to 2020, public expenditure is forecast to reach 21.6 per cent of GDP, a new high. Social welfare, education and health care have seen the largest increases in spending, growing at a faster rate (10-15 per cent) than the local economy (3-5 per cent).
Such rates of increase need the support of a strong and vibrant economy. Thus, any growth in public spending must be subject to constant review. Just as vital is the sound management of the costs and benefits of the programmes. In this regard, is there sufficient evaluation of the effectiveness of our government spending?
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Many times, it seems, problems remain even after the money has been spent. For example, financial compensation for our overworked medical and health care professionals alone is inadequate in addressing the labour shortage problem. The salaries for doctors and nurses are not low, in comparison to the general population. Also, health care workers are not just demanding higher pay, but also a better working environment, so as to provide better care.
Hong Kong’s overworked nurses attend a rally on January 20 to demand better support during the winter flu season. Photo: Robert Ng
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Even the recruitment of foreign-trained doctors and other health care professionals, as has been proposed, is not sufficient in itself. For long-term benefit, Hong Kong should improve its preventive health care to lower the number of doctor visits. To do this, the government needs to do more than throw money at the problem; it needs a plan.
The elderly health care voucher scheme is a good example of ineffective public spending. Some HK$4.2 billion (US$535 million) was set aside for the scheme in the latest budget, an increase of 33 per cent from the year before. Yet a recent study found that, even years after the scheme has been introduced, it has failed to achieve its stated aim of reducing overcrowding at hospitals.
