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Denise Tsang

Ng Kang-chung

Risks to Hong Kong's long-term economic prospects and competitiveness are ballooning and prompt measures are needed, experts have warned.
While Financial Secretary John Tsang Chun-wah showered a HK$34.2 billion package of handouts on the poor, the middle class and small businesses, he said little in the budget to tackle a potential structural deficit within the next decade, academics said.
Tsang floated proposals such as exploring the feasibility of broadening the tax base through a general sales tax, launching a "future fund" savings scheme, and diversifying the economy. Hong Kong also wants to capitalise on the mainland's policy to encourage exporters to tap new markets - but Tsang did not roll out any key new measures.
The looming structural deficit comes on the back of slowing economic growth and a rapidly ageing population.
"It seems the financial secretary is so keen to please the politicians that Hong Kong's long-term competitiveness has slipped out of his mind," said Dr Mo Pak-hung, associate professor of economics at Baptist University.
He also said the government's main role should be to create a good business environment for different sectors to develop on their own, "instead of splashing out money to promote the fashion or film industries".
Hang Seng Bank senior economist Ryan Lam said real security came from a healthy economy.
"The key issue is how the government will deploy the current additional fiscal headroom to boost Hong Kong's longer-term competitiveness and productivity growth," he said.
Professor Terence Chong Tai-leung, of Chinese University's department of economics, said there was little the Hong Kong government could do in terms of mapping out a long-term economic policy.
"With closer integration with the mainland, Hong Kong will have to coordinate with the mainland's development needs," he said.
He also said many people had become used to "expecting sweets" in the budget.
"When we have a big surplus, we give out more money to the people. When we have no money, we tend to control our spending," said Chong.
 


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Financial Secretary John Tsang 'must focus on long-term challenges' for Hong Kong

Financial Secretary John Tsang said little in the budget to tackle a potential structural deficit within the next decade, academics said. Photo: Sam Tsang

Middle class reap tax benefits while poor miss out

Middle-income families stand to benefit most from the rise in child tax allowance and the rebate on salaries tax announced in the budget - while low-income families gain nothing at all. Photo: Dickson Lee

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Hong Kong

Risks to Hong Kong's long-term economic prospects and competitiveness are ballooning and prompt measures are needed, experts have warned.


Financial Secretary John Tsang 'must focus on long-term challenges' for Hong Kong

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Risks to Hong Kong's long-term economic prospects and competitiveness are ballooning and prompt measures are needed, experts have warned.

Risks to Hong Kong's long-term economic prospects and competitiveness are ballooning and prompt measures are needed, experts have warned.