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Contemporary Hong Kong is paying a heavy price for the misguided government decisions on social expenditure made decades ago. In the 1940s and 1950s, the colonial administration and its partners in the business and professional elite insisted that the million people who flooded into Hong Kong after World War II had no right to health or welfare services. They were transients, not even refugees, the colonial administration argued, and they would return to the Mainland once the civil war was over and a stable government was in power. As a result, officials tried to delay as long as possible the drafting of policies to introduce decent health, education and welfare programmes. The colonial administration was prepared to perpetuate Third World standards for these three major social services no matter what the risks in terms of public health, child welfare or outright destitution. Grudgingly, in the 1960s, the government expanded its spending in these areas. In this and subsequent decades, nevertheless, senior officials openly opposed proposals for Hong Kong to escape from its Third World shortcomings and adopt modern standards for welfare and other social services. Throughout, the business community supported the government ’s parsimony towards social expenditure. The government-business nexus’s ‘anti-welfare’ consensus marked a sharp break with history. In the 1930s, officials and the business and professional elite had increasingly accepted a duty to provide decent working and living conditions for Hong Kong families regardless of economic and fiscal constraints. At the height of the severe economic recession in that decade, for example, an official report declared that Hong Kong could afford to pay for improved social services through increased taxation.1 This sense of social obligation seems to have been inspired in part by a widespread conviction throughout China during this era that social reform was an imperative that could not be denied. Sun Yat-sen, the father of modern China, had fostered a belief that social welfare should be regarded as ‘a hallmark of the modern nation state’. 4 Social Reforms: Too Little, Too Late 112 Poverty in the Midst of Affluence ‘The idea of the “welfare state” began to be widely disseminated through the writings of many Chinese intellectuals,’ a Hong Kong historian has pointed out, and ‘so did the discipline of social work.’ Even the warlord Chen Jitang who ruled Guangzhou from 1929 to 1936 launched ambitious housing and social welfare programmes because he felt that he ‘could not afford to ignore the needs of society’.2 The start of all-out Japanese hostilities in 1937 strengthened the sense of social responsibility since the destitute and disabled now included large numbers who were the victims not of personal misfortune or family failures but of enemy action. Hong Kong, like the rest of the country, saw a huge rise in the number of voluntary aid and relief organisations. The colonial administration could have remained aloof on the grounds that the United Kingdom was not involved in SinoJapanese hostilities. Instead, the Governor, Sir Geoffry Northcote, who arrived in 1937, refused to close his eyes to the way ‘malnutrition and slum housing conditions dominate . . . the lives of a very large majority of Hong Kong’s population’.3 Their misery was intensified during 1938 and 1939 when 650,000 war refugees poured into a city whose normal population was only a million.4 The colonial administration chose this moment in history to launch reforms to tackle the acute deficiencies ‘in primary education, in facilities for sick poor, and sick children, in housing of the poorer class’.5 The new programmes’ costs were to be borne by the taxpayer, and direct taxation was imposed for the first time in Hong Kong’s history.6 When British rule was re-established after the Japanese occupation, the Chinese community’s leading spokesman, (later Sir) Man-kam Lo, took it for granted that the pre-war commitments would continue to drive social reforms. Indeed, he believed that the community’s entitlement to adequate housing and social services had ‘received a tremendously added emphasis from the common effort, common toil and common suffering of the war years’. He prophesied that with the democracy which the United Kingdom had promised to its colonial empire in 1945 would come the tax reforms to finance ‘adequate hospitalisation, medical and sanatorium care, universal education, old age pensions, unemployment insurance, workmen’s compensation, etc.’7 The pledge of political reform was to evaporate after 1948, and the vision of social progress was erased from Hong Kong’s...

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