More, and more

Employment subsidies, rental subsidies, and specific measures for the hard-hit sectors. These are some measures the government could consider in addition to the newly announced e-consumption scheme, business representatives say 


– Amount each resident is entitled to in the new round of electronic consumption benefits scheme

Expending over MOP110 billion (US$13.75 billion) from the fiscal reserve in the past three years to maintain a balanced budget amid the Covid-19 pandemic, the local government is now dipping into its public coffers again to launch a new round of electronic consumption benefits scheme and subsidies for utility bills as hurdles remain in the recovery path of the local economy. While these new support measures are welcome, businesses urge more specific initiatives to lessen their operational burdens as well as schemes dedicated to those hardhit by this prolonged economic repercussion.

Following weeks of pledges from officials like the Chief Executive Ho Iat Seng that more support measures were on the way when the local economy has been negatively affected by the surge of coronavirus cases in nearby regions in recent times, the Macau government finally unveiled in late April the third round of electronic consumption benefits scheme — both permanent and non-permanent residents are entitled to MOP8,000 (US$1,000) each, including the start-up fund of MOP5,000 and discount subsidy of MOP3,000. 

Residents are required to spend the MOP8,000 handout in local merchants between 1 June and the end of February next year with a daily cap of MOP300 for the start-up fund and MOP100 for the discount subsidy. The government has already granted residents MOP13,000 each in total in the first two rounds of the scheme in 2020 and 2021 respectively. 

The authorities also advanced in April a six-month scheme of subsidising utility bills, including a monthly cap of MOP100 and MOP300 respectively in subsidies for the water and electricity bills of households, and a cap of MOP500 and MOP3,000 a month respectively in subsidies for the water and electricity bills of merchants. These two new schemes are estimated to cost the city’s fiscal reserve an addition of nearly MOP7.25 billion.

“The two biggest burdens for local merchants at the moment are payrolls to staff and property rentals,” says Fong Kin Fu, president of SME group

Experiences from Hong Kong

“Neither the authorities nor the civic society have expected this pandemic will last for more than two years,” says Fong Kin Fu, president of the Federal General Commercial Association of Macau Small and Medium Enterprises. “The financial and economic support rolled out by the authorities in the past two years and more have helped relieve the financial pressures of local businesses to a certain degree.”

While the administration has launched a new round of consumption benefits programme, Mr Fong points out, “The two biggest burdens for local merchants at the moment are payrolls to staff and property rentals… The government should come up with initiatives that could effectively address these burdens of local merchants.”

Pointing out the nearby SAR, Hong Kong, has implemented the so-called Employment Support Scheme, providing wage subsidies to employers to help them retain their staff, he suggests the Macau authorities could mull new support measures in this area.

Mr Fong’s association has also recently published a survey on the confidence of small-and-medium-sized enterprises (SMEs) towards the market prospect, which found that nearly 10 per cent of the 504 SMEs polled between February and March expected to shut down their operation in the future. Over 85 per cent of the polled SMEs — covering eight sectors that include food and beverage, retail, event and convention, tourism, and others — said their turnover had been halved since the start of the Covid-19 pandemic while 31.5 per cent had laid off staff to reduce their financial pressure.

Short-term financial support measures from the authorities, the recovery of the city’s visitation figure, and the increase in the amount of low-interest loans for SMEs and the extension of the repayment period were the top three factors identified by SMEs that would help their operation, the survey said.

“There is also a worrying sign that not only merchants in the tourist regions have been under pressure but also some merchants in neighbourhood districts as the pandemic persists,” says Lei Cheok Kuan, president of a business association

Not just waiting

Lei Cheok Kuan, chairperson of the Industry and Commerce Federation of Macau Central and Southern District that covers merchants in the city’s downtown, acknowledges the effectiveness of the electronic consumption benefits scheme, which did help local businesses last year by spiking the domestic demand. According to figures provided by the authorities, the second round of the scheme last year facilitated the injection of MOP8.26 billion into the local economy — including MOP5.27 billion in consumption vouchers provided by the authorities, the consumption of MOP2.9 billion by residents, and discounts of MOP900 million offered by financial institutions — and benefited about 20,000 merchants.

But Mr Lei also urges the administration to put forward more support for the SMEs to relieve their financial pressures on payrolls to staff and rentals as well as the shortage of liquidity, as the local business environment has also been exacerbated by the turmoil in the gaming segment aside from the coronavirus outbreak. He refers to the closure of many junket operators since the end of last year over the high-profile arrests of two junket bosses Alvin Chau Cheok Wa and Levo Chan Weng Lin and the heightened supervision. 

“We can observe more merchants have wound up this year compared with the situation last year,” the chairperson says. “There is also a worrying sign that not only merchants in the tourist regions have been under pressure but also some merchants in neighbourhood districts as the pandemic persists.” Government figures show a total of 194 firms were dissolved in 2021 while the city still had 81,060 firms as of end-2021, but this set of data might not reflect the actual situation as businesses could suspend their operation without filing for dissolution with the administration. 

“Apart from the subsidies for utility bills, the government should prepare more targeted support measures, such as a rental subsidy scheme in which a proportion of the property tax paid by landlords could be rebated directly to the tenants,” he suggests, as some landlords have not cut down the rentals for merchants in the past two years.

Local SMEs also just don’t sit on the sidelines and wait for a helping hand. Mr Lei’s association and the city’s largest lender in terms of the asset size, Bank of China Macau Branch, have joined hands to provide discounts and privileges for consumers spending in about 1,000 shops in the areas of Barra, Ruin’s of St Paul’s, Avenida do Conselheiro Ferreira de Almeida and Rua do Campo from May to July. “We just hope to boost the willingness of consumption among residents and travellers, thus spiking the domestic demand and enhancing the turnover of the SMEs,” Mr Lei explains. 

“With the cautious usage of resources, the government now needs to put forward more targeted measures to help the sectors that have been hard-hit by the pandemic,” says Vong Kok Seng, vice-president of the Macau Chamber of Commerce

Cautious and specific

In a panel meeting organised by the prominent Macau Chamber of Commerce in late April, Macau Secretary for Economy and Finance Lei Wai Nong claimed the government has prepared “many proposals” to attract travellers to Macau and spike the local economy, with different tourism products and programmes to be initiated each month until the end of the year. “The administration will strive to do its best in drawing visitors to Macau, a way to resolve the economic predicament now,” he said at the time. Latest government figures said the number of travellers to Macau expanded 8 per cent year- on-year to 1.88 million in the first three months of 2022, but the monthly visitation in March recorded a year-on-year decline of over 30 per cent.

The administration would also “continue to review the market conditions” to launch support measures for local businesses, the official said, adding: “But the financial resources of the government are not unlimited and [we] have to make expenditure wisely.” 

Vong Kok Seng, vice president of the Macau Chamber of Commerce, concurs the cautious usage of public financial resources, hailing the administration’s move in launching the new round of consumption benefits scheme and utility bill subsidies. “The authorities have already used the fiscal reserve for three years in a row to maintain a balanced budget. Though there is still over MOP600 billion in the fiscal reserve, the financial resources of the government are really not unlimited,” he agrees. Data from the Official Gazette show the amount of the local fiscal reserve totalled over MOP630 billion as of February 2022, enough to cover the government’s expenses for more than six years without any income.

“With the cautious usage of resources, the government now needs to put forward more targeted measures to help the sectors that have been hard-hit by the pandemic, including the sectors of event and convention, food souvenirs, hotel, tourism and others, apart from the consumption benefits scheme,” Mr Vong says. “The government has a clear grasp of what challenges residents and businesses face under this economic climate.”