The Legislative Assembly passed the outline of the government’s 2023 budget bill during yesterday’s plenary session, according to which the government will continue to run a budget deficit next year.
Introducing the outline of the 2023 budget bill, Secretary for Economy and Finance Lei Wai Nong said that the government would allocate 35.62 billion patacas from its extraordinary reserves so as to fill the deficit, i.e., to keep a formally balanced budget.
Lei said that this was based on the government’s estimate for next year’s gross gaming revenue (GGR) of around 130 billion patacas. Macau’s gaming operators pay up to 40 percent of their GGR to the government as direct gaming tax and additional “contributions” to a host of public causes.
According to the bill, the government’s expenditure for next year is budgeted at 104.4 billion patacas, a year-on-year increase of 4.9 billion patacas, or five percent more than the government’s 2022 budget.
Lei underlined that the government’s special allocation for the Non-Mandatory Central Provident Fund will once again not be carried out because the government has been coping with a budget deficit since 2020, i.e., for four consecutive years including 2023.
Macau’s confirmed its first COVID-19 case in January 2020, after which the government began to spend large amounts of money to tackle the pandemic.
Due to the adverse impact of the pandemic on Macau’s economy and finances, the government has refrained from paying its special annual allocation of 7,000 patacas into residents’ Non-Mandatory Central Provident Fund accounts.
However, Lei said that the government will continue paying a raft of subsidies, benefits and allowances such as education fee allowances and various other allowances for the education sector, old-age pensions, disability pensions, and allowances for disadvantaged families.
Lei said that the government has earmarked 7.1 billion patacas for its annual wealth-sharing cash handout in 2023. This year, permanent residents received a 10,000-pataca handout, while non-resident residents got 6,000 patacas. Lei did not specify how much each permanent and non-permanent resident will receive next year.
Lei said that in the first half of this year, the government had lost 17.4 billion patacas on its investments, with a return of minus 2.8 percent.
Lei said that this was caused by the sharp fluctuations in the debt, stock and foreign exchange markets this year, with some major economies implementing tighter monetary policies in response to high inflation amid the uncertainty caused by the novel coronavirus pandemic, further leading to a sharp correction in global financial markets.
Lei also said the government would adopt a more conservative and prudent approach towards its investments, stressing that the Macau Monetary Authority (AMCM) was working hard to manage investments to “preserve Macau’s wallet”.
Lei said he believed that Macau’s economy will recover from the adverse impact caused by the COVID-19 pandemic, as the central government had resumed the electronic application procedures for mainlanders to apply for Individual Visit Scheme (IVS) travel permits, as well as permits for mainlanders’ tour groups to visit Macau, initially from four provinces and one municipality, namely Fujian, Guangdong, Jiangsu and Zhejiang as well as Shanghai.
Lei also said he was confident that the city’s COVID-19 prevention and control measures would be more “precise and swift” following the so-called 618 outbreak, which began on June 18 but was brought under control in a matter of weeks.
Lei said the government expects the average number of visitor arrivals to rise to 40,000 a day next year, thanks to the new arrangements of the central government.
Prior to the COVID-19 pandemic, Macau’s daily average of visitor arrivals reached nearly 100,000.
Lei pledged that the government would do its best to lower the negative impact caused by the impact of the COVID-19 pandemic on the local economy.
Secretary for Economy and Finance Lei Wai Nong addresses yesterday’s plenary session in the Legislative Assembly’s (AL) hemicycle. – Photo courtesy of TDM
