A leading free-market watchdog sounded a warning for Hong Kong's economic freedom yesterday, saying the city had bucked world trends and experienced an accelerating decline in key indicators over the past 10 years. Mark Mullins, executive director of the Canadian-based Fraser Institute, said while Hong Kong was still ranked the world's freest economy, it should not take its position for granted. 'In terms of the math, Singapore is very close behind,' he said. Hong Kong has topped the Economic Freedom Index of the World, published by the Fraser Institute, since the 1970s, although its overall score fell from a peak of 9.1 in 1995 to 8.7 in 2004, the latest score. The institute has published the index with the Cato Institute in the US since 1996. Dr Mullins noted that 10 years was too short a time frame, and the overall drop too subtle, to say there was a definitive declining trend in Hong Kong's economic freedom. But he said the declines in scores were worrying because they related to industrial subsidies, red tape and the integrity of the legal system. 'Government intervention in the market and the intention to do so are growing,' he said. '[Government] spending is down recently, but the government is caught in vocal demands for more intervention.' 'There is a sense of politicisation of decision-making,' he said. 'I wonder if integration with China is driving some of it and playing into people's perception.' He also attacked the proposed goods and services tax, saying it was 'not revenue neutral' and that he 'didn't see the economic case for broadening the tax base'. 'It is literally meant to raise money and not to increase the base of taxation in the system,' he said. The tax would also likely have an unintended but fundamental impact on businesses, Dr Mullins said. This was because there was limited interaction between companies and tax authorities under the existing tax regime, but a GST would entail 'significant compliance costs and reporting requirements'. Dr Mullins said he expressed his views to Financial Secretary Henry Tang Ying-yen on Monday.