Not unexpectedly, the 2012-2013 HKSAR budget provided numerous give aways to just about very sector of Hong Kong's society with the middle class perhaps benefiting most.
However, the last several years have produced a distinctly worrying trend with government expenditure rising far more rapidly than revenues or GDP growth generally. This is simply not sustainable and it is long past time that the government stopped pandering to political demands and special interests (such as the grossly overpaid civil servants) and taking steps to reduce the number of people taking from the pot of taxpayer funded revenue. This is the root cause of the economic issues which are plaguing the United States and much of Western Europe - too many people taking too much by way of entitlements out of the economic pot. Its been shown to be unsustainable in those countries (and many other places historically) and there is no reason why Hong Kong should be any different.
Given the extreme imbalance between taxpayers and entitlement recipients in Hong Kong, it would be a major cause of concern for Hong Kong to be granted greater democracy - the political competition to promise higher entitlement payments is already out of control and it would be of huge concern if continued fiscal mismanagement were to result in higher taxes. At the end of the day, Hong Kong has just two competitive advantages over our Asian rivals - cultural and political proximity to China and a competitively low tax regime. The former will erode over time as China continues to open up and the latter is the only thing that truely distinguishes us from places like Singapore (where the quality of life is unquestionably higher). In this context, its also worth bearing in mind that Hong Kong's tax base is also relatively narrow and there is an unknown but assuredly significant portion of the taxpayers who could easily redomicle themselves to places with cleaner air (something the HKSAR government has repeatedly demonstrated it has no interest in dealing with), cheaper and better properties and other lifestyle advantages.
As a final thought on Hong Kong's growing entitlement problem, it is fortunate the the HKD/USD peg forces the government to maintain sufficiently large reserves to deter speculative attacks (as were seen during the Asian crisis).
In short, the budget was the latest in a series of budgets that do no more than attempt to make the government popular at the expense of placing Hong Kong's future in a more vulnerable state. The only vision shown is that of a financial secretary looking forward to reading the headlines the day after.