Policy addresses often can be fraught with undertakings and maiden addresses even more so. Their potential for outlining an administration's vision, which will affect business confidence and decision making, gives them a heightened status.

Chief Executive Leung Chun-Ying's pending policy address therefore shapes as a potential watershed in Hong Kong's business and economic history. There are two reasons.

The first is the fact that it is the Chief Executive's maiden address, while the second concerns the economic and historical position in which the SAR finds itself.

If it is to be a positive watershed, the address must articulate effective policy prescriptions in a number of key areas.

Hong Kong faces a number of challenges amid continuing global and regional uncertainty. While ideally located in what is the most dynamic economic region, Hong Kong - somewhat incongruously - finds itself in a parlous situation.

Its position as the region's commercial and financial hub is being challenged, and not only by traditional rival Singapore. A number of cities on the mainland are growing in prominence as financial centers of gravity - a trend which will only continue.

Add to this an aging population, a narrow and volatile tax base, and a widening income gap and the magnitude of the challenges facing the SAR become obvious.

These factors must inform domestic policy decisions and how effectively they are addressed will shape Hong Kong's ongoing competitiveness and standard of living.

Addressing these challenges will require of policy makers an acute awareness of the landscape in which businesses must operate and how this will shape business decision making.

Information gleaned over time by CPA Australia, through surveys and consultation with its members and the broader Hong Kong business community, delivers a valuable insight into how business views these challenges and what it believes are the necessary prescriptions.

The business community's views have been canvassed on a range of issues including taxation, human capital and general economic sentiment and while the responses have not been universally downbeat, the clear message was of the need for urgent policy action in certain key areas.

The need for comprehensive tax reform, an education system that is more attuned to business needs and measures to address the cost of doing business in Hong Kong featured prominently among the concerns expressed by business leaders.

These all point to issues around ensuring Hong Kong's ongoing competitiveness in a dynamic and volatile business and economic landscape.

Events in Europe and the United States, as well as the mainland of course, will continue to influence Hong Kong's fortunes, but it can still remain the author of its own story.

The picture is definitely not all doom and gloom however. Hong Kong's many attributes as a center of business and finance have not evaporated.

The strength of its business and regulatory institutions remain as does a strong residual confidence - both in this region and globally - in doing business in the SAR. The importance of these factors cannot be overstated.

It remains a jurisdiction which is viewed by most others as a shining example of commerce, industry and innovation.

However, no nation or region can assume continued economic primacy as a birthright. In recent years we've seen the dangers of such complacency in other parts of the globe.

Leading the competitiveness race by definition denotes hard work and a willingness for sometimes making tough and often, initially at least, unpopular decisions.

The Chief Executive's maiden policy address presents a critical opportunity to map the path ahead.

It must strike the right balance between articulating a long-term vision for Hong Kong's place in a shifting landscape and delivering the more immediate policy prescriptions necessary to steady the ship.

The author is CEO of CPA Australia.

(HK Edition 01/12/2013 page3)