Gov’t to continue expenditure control policy in 2023

The Macau SAR Government will continue its expenditure control policy in 2023, a Chief Executive Office dispatch indicates.

The Chief Executive has directed that, in view of the uncertainty in the economic environment, departments should carefully assess their budget expenditure when preparing their budget proposals for 2023 and that the amount budgeted should not exceed the amount budgeted for this year.

This provision applies to the department of cash accounting system or accrual accounting system. However, the amount of expenditure on risk reserves, retirement and pension systems, depreciation and amortization, financial expenses, etc., is not restricted.

The directive also states that the number of personnel in each department should not exceed the approved baseline and that additional personnel should not exceed the number of posts available to the oversight entities.

The local administration has also repeated the MOP130 billion (US$16 billion) estimate in gross gaming revenues for 2022, expecting some MOP45.5 billion in gaming taxes.

However, so far the first four months of the year have reported a 36 per cent year-on-year drop in gaming results, mounting to MOP20.4 billion.

With direct gaming taxes falling by 5 per cent in the first quarter of this year to some MOP8.7 billion, the Macau SAR public administration income in total has dropped by 15.2 per cent year-on-year to MOP22.3 billion.

At the same time, government budget expenses jumped by 11.7 per cent to MOP20 billion between January and March, of which MOP11.3 billion were directed just for ‘transfer, funding and subsidies’ including pandemic relief support.

Local authorities have so far allocated MOP37 billion from the local financial reserve to balance the budget to account for several economic relief measures, including a MOP5.9 billion fourth-round consumer e-voucher scheme.

Since 2020 local authorities have recurred almost MOP150 billion from the financial reserve to balance the budget and finance economic stimulus measures, as revenue from gaming taxes – usually the largest input to the local coffers – shrank considerably.

The Macau SAR gross domestic product (GDP) has fallen by 9 per cent in the first quarter of this due to the weakening total demand.

The International Monetary Fund (IMF) has maintained its Macau SAR’s gross domestic product (GDP) 15.5 per cent growth projection for 2022 driven by the gradual return of foreign tourists and the recovery of domestic demand.

Macau’s gross domestic product (GDP) grew by 18 per cent year-on-year in real terms in 2021, after contracting by 54 per cent in 2020.