To address increasing public concern about poverty, Tung is expected to establish a high-level committee to look into the city's growing poverty levels. As a start, the committee will try to measure poverty by establishing a minimum poverty line, something that the administration has refused to do.

Although Hong Kong's unemployment rate fell to 6.7 percent from 8 percent early last year, there are still more the 200,000 out of work, according to government figures.

Social welfare organizations say the gap between rich and poor has reached an alarming level in Hong Kong. Unionist and Legislative Council member Lee Cheuk-yan claims that the number of those living below the poverty line grew from just over 900,000 in 1991 to nearly 1.3 million in 2001. The Society for Community Organization (Soco), a social welfare concern group, says there are some 350,000 children living under the poverty line: about one-third of all Hong Kong's children. People earning less than HK$4,000 a month are living below the poverty line, according to non-governmental organizations like Soco.

Cuts in welfare payments over the past two years have galvanized anti-poverty groups. For a government that is petrified of public protests, that may be reason enough to act. An improving fiscal situation may also allow more room for maneuver.

Hong Kong's lowest paid workers have been working longer hours for steadily declining wages - by as much as 20 per cent, according to the government's own figures - since the handover. But, in October last year, the Liberal Party shot down a Legislative Council motion which called on the government to set a minimum wage and maximum working hours.

Despite the absence of an official poverty line, there's little question that inequality is rising. One of the best-known measures of income inequality is the Gini coefficient.

The Gini coefficient is a number between 0 and 1, where 0 corresponds with perfect equality (where everyone has the same income) and 1 corresponds with perfect inequality (where one person has all the income, and everyone else has zero income).

In its Human Development Report 2003, the United Nations calculated that Hong Kong's Gini coefficient rose sharply from 0.476 in 1991 to 0.525 in 2001.

This can hardly be a source of pride for Hong Kong.

It was the third-highest figure in the world, barely trailing developing countries Central African Republic and Honduras.

Hong Kong's figure far exceeds those of other developed countries like Singapore (0.45), the United States (0.35) and Japan (0.25).

Tung acknowledged in his policy address last year that ``globalization has aggravated poverty generally in many places around the world and we are no exception.''

He pledged to ``further examine how to help the poor elevate themselves, and to improve their economic situation through sharing the opportunities that arise from social development.''

As of September 2004 the total number of Comprehensive Social Security Allowance (CSSA) recipients stood at 534,217, the highest ever. This represents a three-fold increase from 1994.

As 2004 came to a close, Tung told media executives that his 2005 policy address would announce a new anti-poverty committee to draft poverty relief measures.

The first task of the committee will be to establish a poverty line in Hong Kong, giving both authorities and community organizations an objective benchmark by which to measure performance and establish policy.

It is not hard to find examples of policy failure under the Tung administration, but perhaps the worst, if not best known, is the growing number of children living in poverty.

A Soco survey released in September last year found that about 350,000 children, a quarter of all Hong Kong children, live in poverty.

Social Welfare Department statistics show that the number of children in families receiving CSSA has risen six times in the past decade: from 20,900 in 1993 to 145,200 in July 2003.

The department said this accounted for 11 per cent of all children in the territory in 2003.

As current government assistance merely covers school fees, the families of poor children are unable to afford additional educational necessities such as textbooks, bus tickets, computers, or to simply join extra-curricular activities in their spare time.

Despite the generally improving economy, the government has slashed welfare spending by 3.2 percent and funding to NGOs by 2.5 per cent in the current fiscal year.

Meanwhile, Hong Kong's economy has rarely looked healthier.

Accounting firm PricewaterhouseCoopers has estimated that surging land sales revenue and a general economic recovery could ease the fiscal pressure on the government.