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

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".