Our guiding principle in developing welfare services is to build a caring community with self-sufficiency, dignity, harmony and happiness. Social welfare forms an important component in the Government's responsibility for social development as enunciated recently by the Chief Executive in his 2000 Policy Address, namely -
It is with this philosophy in mind and a budget strategy to shoulder special responsibilities towards the disadvantaged that social welfare has grown significantly over the last decade. In the ten-year period from 1992-93 to 2001-02, total recurrent expenditure on social welfare increased from $7.6 billion to $30 billion. As a result, welfare's share of total recurrent public expenditure increased from 8.3% to 13.8%. Of the estimated expenditure of $30 billion for 2001-02, about two-thirds or $21 billion will be spent on the social security schemes providing financial support to those in need. The remaining $9 billion is spent on a wide range of support services on Family and Child Welfare, Elderly Services, Rehabilitation, Medical Social Services, Services for Offenders, Community Development and Young People. These direct services are provided by SWD and 182 Non-Government Organisations (NGOs) under Government subventions. Estimated total recurrent subventions to NGOs in 2001-02 amounts to $7.2 billin. Departmental expenditure accounts for the remaining $2 billion in the social welfare budget.
Let me just illustrate to you how much we are doing for the needy with a $30 billion welfare budget -
But $30 billion is a significant share of public resources. From my previous job, I am acutely aware that the spending cake is finite. Every dollar spent on welfare is at the expense of other policy areas. It is therefore my duty to ensure the efficiency, economy and effectiveness of the welfare expenditure. It is in pressing ahead with securing optimal value for money in the delivery of welfare services that I find my previous Treasury job experience extremely helpful.
First, I believe in small government. Today's public administration must try to shorten the distance between the point where service is delivered and the other end where decisions are made. Delayering, streamlining and process re-engineering are common day reform measures. SWD had grown into a bureaucracy of 5,640 just before the turn of the century. We are now down to 5,300 and have plans to lose a bit more in the course of the year. Separately, we are planning a re-organisation which will see the three-tiered structure of Headquarters/Region/District delayer into a Headquarters and District structure. This will enable us to be more responsive to welfare needs in the district.
Secondly, we should focus on what we are getting rather than what we are paying. An outcome-focused and result-oriented approach in managing welfare services has been adopted for both departmental and subvented services. We have successfully put in place a new subvention system, what we call the Lump Sum Grant, that will give NGOs the necessary flexibility in resource deployment. This new subvention mode which once raised serious concerns is now the mainstream subvention system in the welfare sector, practised by 126 NGOs who together account for over 90% of welfare subventions.
Thirdly, I believe that open and fair competition in a regulated environment which has made Hong Kong tick will work equally well in social welfare. The system of distributing new welfare service units to NGOs in a conventional manner is something of the past. NGOs that are interested to operate new welfare services must now go through a vigorous quality-based competition based on service specifications, innovation and value-added features.
Fourthly, welfare services can also benefit from private sector participation which, through its enterprise and efficiency, can come up with more economical solutions to deliver a public service. Of course in an area of human services generally patronised by the disadvantaged, we need to pay particular attention to specifying service requirements and monitoring performance. In this respect, we have successfully contracted out the home care and meal services achieving productivity gains of more than 20%. We will shortly be inviting both NGOs and private sector to bid for the operation of new Government purpose-built residential care homes for the elderly.
Finally, there is a general consensus within the community that we do not wish to see Hong Kong become a welfare state relying on heavy taxes, that there is a limit to how much the Government can spend and that the virtues of self-reliance, family cohesion and community support should be preserved. To this end, I believe that all of us in the welfare sector have to ensure that we are promoting, not impeding, the individuals' will and capacity to stand on their own feet. It is against this background that we have adopted since June 1999 a Promoting Self-Reliance strategy under the Comprehensive Social Security Assistance Scheme. Through active employment assistance, the CSSA unemployed caseload has dropped by some 30% since then.
I thank the Hong Kong Democratic Foundation again for inviting me to speak during your luncheon. This is a distinguished gathering that through its regular Newsletter and luncheons provide a much-needed forum for rational discussion and policy debates.
The above does not necessarily represent the views of the Foundation
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