Govt explores cost-saving measures amid cuts to social welfare spending, welfare chief says

Savings may need to be drawn from non-recurring expenditures if further adjustments to social welfare spending are required, said Secretary for Labour and Welfare Chris Sun Yuk-han.

According to the Budget 2025/26, over 170 social welfare organizations in Hong Kong are projected to reduce their spending by 7 percent by the 2027/28 fiscal year. 

Sun noted that the authority has sought ways to “help as much as possible,” including removing barriers, leveraging technology and streamlining processes to ensure that the social welfare sector and the government can navigate challenges together.

Speaking on a TV program, he stated there was always an ongoing demand for social welfare services due to an aging population, noting if adjustments to spending are necessary, money may need to come from savings in non-recurring expenditures.

Taking the approved HK$20 billion from the Finance Committee of the Legislative Council for the Labour and Welfare Bureau to purchase social welfare facilities as an example, Sun suggested utilizing the fund in innovative ways.

He explained that social welfare organizations serving children or the elderly typically require facilities on lower floors for easier access. Therefore, the government could “swap spaces” by relocating organizations that provide youth or family services to higher floors, freeing up space while saving costs.

He also noted that the government must maintain fiscal discipline and cannot directly allocate the HK$20 billion fund to social welfare organizations.

Meanwhile, Sun noted that social welfare organizations could have a total of HK$6 billion available for use, including additional reserves. 

He stated that they collectively hold about HK$4 billion in reserves, with the government proposing to allow small organizations to retain these reserves for five years and large organizations for six. 

He said this could enable some to save an additional HK$65 million for use during periods of reduced government funding.

Additionally, Sun stated that social welfare organizations have around HK$4 billion in mandatory provident funds and savings accounts. 

While not all of these funds are accessible, he noted that “careful calculations” could potentially increase the amount of accessible reserves to between HK$5 billion and HK$6 billion.

(Cheng Wong)