Despite the record drop in tax revenues from casinos, the government has increased spending like never before. But don’t think these expenses were investment in roads, bridges, ferry terminals or any substantial infrastructure for the city. The money actually flowed to higher wages, subsidies, public funds and other current expenses of the Public Administration. While public coffers got 34 per cent less in revenues in the first five months of the year, public expenses were up by more than 50 per cent. Public investment? Almost non-existent. According to the latest data from Financial Services Bureau (DSF), the government’s fiscal surplus amounted to MOP25.3 billion (US$3.17 billion) between January and May. This represented a record drop of 54.9 per cent or MOP31 billion less than a year ago; enough money to build a new Wynn Palace, for example. But that’s not all: what the government ‘profited’ (fiscal surplus is the difference between revenue and expenditure) in the first five months of 2015 was around half of what it collected in the same period in 2014 (MOP56 billion) and 2013 (MOP47.7 billion). The main driver of the weaker performance of public accounts this year has been the decrease in tax revenues from the gaming industry, responsible for 82 per cent of all government revenues until May. Direct taxes from gaming fell 35.4 per cent compared to January May 2014. The government amassed MOP38.4 billion, more than MOP20 billion less than last year. This made total revenue shrink by 33.8 per cent. Public expenditure The difference to previous years has been the hike rate in public expenditure. Overall public spending went up 49.4 per cent year-on-year until May. The majority of the increase has been recorded in the current expenditure account, meaning all regular spending the government has to do to keep the government running. This includes paying wages, awarding subsidies, chanelling money to funds and official cabinets. The current expenditure registered a 47.5 per cent jump in the first five months from 2014 climbing to MOP19 billion, MOP6 billion more than last year. But one of the points that continues to never change is the low public investment. From January to May, the government’s investment plan, known as PIDDA, spent MOP649 million, a residual amount in a city that is expecting to open several gaming properties worth MOP215 billion in investment. PIDDA expenditure with almost half of the year completed, was only 4.4 per cent of the total amount budgeted for this year (MOP14.8 billion). The amount is also 1.6 per cent of all the money the government collected from gaming taxes. For the total of this year, government budgeted a fiscal surplus of MOP51.8 billion, a likely goal given that the execution rate is close to 50 per cent already. However, the figure is far from the two previous years, when fiscal surplus bordered the MOP100 billion mark.
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