While much of yesterday's budget was aimed at addressing problems associated with the city's ageing population, critics said it did little to address one of the root causes - the low birth rate.
While Financial Secretary John Tsang Chun-wah handed out more than HK$660 million in new funding to provide services for the city's growing number of elderly people, there were no new policies or allowances aimed at encouraging Hongkongers to start or extend families.
"The government has not cleared the obstacles which hinder housewives re-entering the job market," said Professor Paul Yip Siu-fai, a University of Hong Kong demographics expert and a member of the government's steering committee on population policy. "They did not even increase the child [tax] allowance, or encourage the commercial sector to introduce flexible working arrangements."
Government sources said the administration opted against further increasing the child tax allowance, which allows Hongkongers to earn HK$70,000 tax-free for each child they have, because a lack of tax breaks was not the main barrier to people having children. The allowance was increased by HK$7,000 last year.
"We have already increased the child allowance by 40 per cent over the past three years," the source said.
According to government demographic projections, some 30 per cent of Hong Kong's population in 2041 will be aged 65 or above, up from 14 per cent now, pushing up health care and welfare costs while potentially hitting tax receipts as workers retired.
Tsang cited research from his working group on long-term fiscal planning to warn that years of healthy budget surpluses could turn into deficits within seven years if spending on health, education and welfare continued to grow in line with recent trends, which would push up government spending by 7.5 per cent per year. The working group expects government revenue to grow at 4.5 per cent per year.
Enhancing services in these three areas by just one or two per cent per year above the increases demanded by demographics and inflation would lead to a deficit within eight to 10 years. The group's mildest projection, in which spending increased only in line with demographics and inflation, would still see government spending grow by 5.3 per cent annually, leading to a deficit in 15 years.
"The projections … provide a clear warning and call for serious attention," Tsang said.
More immediately, Tsang has committed the government to spending HK$120 million to provide 950 elderly people with subsidised places in care homes amid heavy demand.
They include 400 places in homes run by Hong Kong NGOs on the mainland, a first for the government.
Up to HK$160 million will be spent to upgrade 51 social centres for elderly people into "neighbourhood elderly centres", where extra staff will be hired to help care for elderly people with dementia.
Tsang said the government was also exploring the possibility of issuing vouchers for residential care services to the elderly, and had earmarked HK$800 million to issue some 3,000 such vouchers over a three-year period starting next year.
But the Community Care and Nursing Home Workers General Union accused the government of neglecting the industry's biggest problem - a shortage of staff.