AL PLENARY | Gov’t plays safe with ‘cautious’ budget

Francis Tam (center)

The Budget Law for 2015 passed its first reading in yesterday’s Legislative Assembly plenary meeting. Yet lawmakers voiced concerns over gaming revenues, which declined some 23 percent year-on-year last month, with the Secretary for Economy and Finance reiterating that next year’s casino tax revenue will remain at “roughly the same” figure this year.
Francis Tam hinted that the government is being cautious when drafting and discussing the Budget Law for 2015, as gaming revenue dropped for a fifth consecutive month last month. The overall revenue estimated for next year is set at over MOP154 billion, representing a 0.7 percent increase over this year, while total expenditure is due to reach MOP83 billion, representing a 7.9 percent increase when compared to 2014.
The government estimates it will collect over MOP115 billion in special casino tax revenue (direct tax) next year.
Lawmaker Ng Kuok Cheong questioned the administration on whether the budget estimations were rigorously calculated or if it was merely an overall balance. The legislator argued that casino tax revenue should be ploughed into different sectors to enhance Macau’s development, and suggested that subsidies and contributions to the Macau Foundation could be shared with other sectors.
Currently, there’s an effective tax rate of 38 to 39 percent on casino gaming revenue, 35 percent of which relates to tax on gross gaming revenue, while 1.6 percent is a contribution to the Macau Foundation and 1.4 percent is a contribution to SJM.
“Gaming revenue taxes are applied in different investments and for instance have allowed the Macau Foundation to be granted huge sums. But gaming revenues might not last long, so could those subsidies [to the Macau Foundation] be reduced or be transferred to other sectors, for instance to provide pensions for the elderly or to further invest in education?” Ng Kuok Cheong questioned.
Lawmaker Kou Hoi In said they are worried about gaming revenues for next year. He also requested further information on the Budget Framework Law revision, as lawmakers have been advocating for a reinforcement of the AL’s role in supervising the government.
Mr Tam stressed that, according to their forecast, casino revenue tax collected next year will be similar to the amount collected in 2014. He acknowledged that, since gross gaming revenues have dropped consecutively from June to October, the administration has been cautious in drafting next year’s Budget Law.
The Secretary assured that gaming revenue in 2015 is due to remain “roughly the same” as this year. He hinted that the government drafted the Budget Law for next year taking as a reference gaming revenues of the past five months, thus providing a more ‘cautious’ estimation.
In response to Kou Hoi In’s question, Mr Tam said that the Budget Framework law is currently being revised and the government plans to submit a first draft by the end of the current year.
Lawmakers have also requested the authority to regularly provide information on multi-year construction projects, particularly by updating the AL on the budget estimations and possible overspending.
The Secretary said they will be providing further information on multi-year projects next year, promising to keep lawmakers updated on budgetary issues.
Discussing the Budget Law for 2015, legislators raised criticism over an estimated increase on vehicle tax revenue, which is due to rise more MOP198 million, reaching MOP1.3 billion. Lawmakers questioned whether the increase on vehicle tax revenue is related to a possible increase on the number of vehicles on Macau’s roads or even an increase on the purchase of luxury cars.
“Is this related to a growing number of vehicles? Our air quality is already bad…” Mak Soi Kun reiterated. Mr Tam assured that this “is not a significant increase” and that estimations are based on the vehicle tax applied this year.

Concerns about public transportation

Lawmakers voiced concerns over public transportation issues in Macau, as well as significant gaming revenue drops over the past five months.
Last weekend saw a high number of tourists strolling around the city’s already busy streets, as yet another edition of the Macau Grand Prix and the Macau Food Festival took place. In a spoken enquiry, lawmaker Zheng Anting questioned Macau’s capacity to receive more tourists, as mobility deteriorated significantly last weekend.
Furthermore, he recalled how four transportation companies have found it difficult to survive in Macau over the past four years. First airline Viva Macau, followed by ferryboat operator Macao Dragon Company, the bankruptcy of Reolian last year, and now Vang Iek Radio Taxi that stopped operating the so-called yellow taxis.
The lawmaker urged the government to assess the whole concession scheme, so that each project’s budget is also closely monitored.
With the Chief Executive soon beginning his second term, it is believed that his five-secretary team will change. Some lawmakers took the opportunity to question Chui Sai On’s priorities for his second term. Chan Meng Kam, for instance, recalled that Macau’s industry relies heavily on gaming and that Small and Medium-Sized Enterprises often face challenges due to a high inflation rate. He added that one of Macau’s greatest issues – housing – lacks “long-term scientific planning.”

On the lawmakers’ agenda

MIGRANT WORKERS Song Pek Kei remains concerned over the increasing number of non-resident workers living in Macau, particularly after four Southeast Asian migrant workers were killed in a fire that broke out in a small boutique last week. Although it is important to acknowledge that foreign workers are contributing to Macau’s development, the lawmaker recalled that they’ve also contributed to a greater demand for housing units, thus playing a role in the rise of rental prices. “It has led residents to live subject to rising rental prices and high inflation rates, which triggers social conflict,” she said. “Non-resident workers, who leave their home countries seeking a job, only wish to earn a few more cents,” the legislator added. She said that if the employer does not provide accommodation, migrant workers have no other option but to share a flat with other migrants, which is often dangerous, as some housing units do not provide enough safety conditions for all. The legislator urged the government to discuss with larger enterprises, namely gaming operators, to provide accommodation and transportation for their foreign workers.

ZHUHAI REAL ESTATE Ho Ion Sang claims that real estate brokers in Zhuhai are promoting and selling flats to Macau residents while buildings are still under construction, which is in violation of the law. He stressed that legislation in China forbids the promotion and sale of housing units that are still under construction without specific authorization. However, the lawmaker said Macau residents have claimed that real estate agents have been advertising and selling flats located in Zhuhai, in a building that hasn’t been built yet. The lawmaker said agents are charging clients a deposit on the house purchase. “Real estate agents in Macau assure that the sale of these apartments to Macau residents has had a positive response here, with deposits surpassing the expected amount and that all housing units have now been sold,” he stated. The lawmaker urged local residents to gather more information on mainland China’s legislation, before acquiring a house in Zhuhai.

RIGHTS OF THE CHILD Melinda Chan has called on the government to produce legislation ensuring children’s rights, responsibilities, and duties. Two years ago, Ms Chan insisted that she question the government on the implementation and execution of the UN Convention on the Rights of the Child. “It is a shame that the government has not yet initiated legislative work governing the rights of children,” she said. Ms Chan suggested amendments to the criminal code, namely by assessing current penalties’ efficiency for crimes against children. She also stressed that there is a need to legislate on parents’ accountability when children are neglected. The lawmaker called on the government to reinforce measures on the safeguarding of both women and children, thus speeding up the drafting of the domestic violence bill.