The car-buying controversy is spiralling into political disaster for the government, observers in the business community believe. The furore was diverting attention away from more critical issues, such as whether the latest Budget had sufficient depth to tackle Hong Kong's economic problems, they said. Observers said they were worried that international investors would overlook Hong Kong and choose to invest elsewhere. 'Credibility is of high importance to most investors. And this is certainly detracting from our credibility,' said one locally-based US businessman. Kim Eng Securities head of research Stephen Brown agreed. 'Who cares about the car? [But] on a deeper level, this issue has spiralled. By saying that Leung was 'grossly negligent' in buying the car but not firing him, Tung has set a poor precedent,' Mr Brown said. 'Quite obviously, Leung is not negligent but grossly inept. Negligence is something that has to revolve around doing your job poorly. [In making the wrong choice of words] Tung has created a monster by accident. 'Leung will probably have to resign. He has no credibility in tackling the deficit or in talking about the peg. Look at Alan Greenspan, he's got more money than Leung but he's conservative and boring, which is what the business community likes,' Mr Brown said. Last week, Standard & Poor's said that, while the uproar over whether Mr Leung avoided paying taxes on his new car was a 'minor affair', it was an example of a loss of cohesion in government policy, due to the administration's new ministerial system. The new system's delegation of responsibility across the various porfolios meant decision-making was being done by many officials who lacked experience, it said.