Concerns over lack of inspection to publicly owned companies

The Legislative Assembly (AL) Follow-up Committee for Public Finance has expressed concerns over the lack of inspection authority over publicly-owned companies and their branches. According to the president of the committee, Mak Soi Kun, the issue was acknowledged by the Secretary for Economy and Finance, Lionel Leong, during yesterday’s meeting at the AL.

“The Secretary [Leong] recognized that there is a need [to] reinforce such inspection [to the public owner companies],” Mak said in the media briefing, noting that the Finance Services Bureau (DSF) “is unaware of the operations of those branches.”

The possibility of the need for “new legislation” in this field was aired although a calendar for this process was not advanced.

Mak said that the Committee has questioned the government on how many publicly-owned companies are created with the purpose of investment of public funds and how many branches are involved, information that the government failed to provide during yesterday’s meeting.

Another matter in discussion was the spending of external investment managers, along with another topic regarding managers that was not revealed due to “duties of secrecy” within the managers’ contracts.

Nevertheless, Mak gave a positive review of their work saying, “the expected results were achieved [on the applications delivered to external managers].” Mak went on to mention that the non-audited profits had a return tax of 4.8 percent (in 2017).

Foreign exchange reserves had a return of 2.3 percent, reaching MOP3.5 billion, according to the Macao Monetary Authority.

The president of the committee reaffirmed that the government has maintained its position of using the concepts of “prudence” and “security” as investment principles, ideas that are supported by the committee.

The reasons behind the low rate of implementation of the budget and the Public Investment Plan (PIDDA) in 2016 was another topic addressed in the meeting. Mak said it was due to several reasons, but mostly due to a “lack of professionalism of the budgeting plan.” Government representatives explained that the enforcement of the new budget law has not started, and that the services, most of the time, “lack in professionalism while doing the forecasts since they do not possess specialist staff on the matter.”

Lack of inter-service coordination was also another of the reasons acknowledged for the low rate of implementation, a situation that according to Mak, should be solved now with the imminent enforcement of the budget law.