Lawmakers not happy with absence of Central Provident Fund investment

Secretary for Economy and Finance Lei Wai Nong presented next year’s budget to the parliament yesterday, but the absence of government investment in the Central Provident Fund sparked concerns.
Pursuant to the law, investments can only be made when the government has achieved a surplus in the previous year. For the last two years, however, the government needed to take funds from its reserves in order to balance the accounts, and could not attain a surplus.
Several lawmakers raised the issue in their questions for the senior official.
Directly-elected lawmaker Leong Sun Iok stated his understanding of the government’s stance on spending and saving rigorously, and then moved on to question why investment in the Central Provident Fund is absent.
The MOP7,000 investment made by the government prior to the Covid-19 pandemic was vital to many low-income and low-savings senior residents. The social security system started quite late in Macau, leaving a large group of local working residents without coverage of the fund when they were young.
Not having had sufficient time to make contributions into the fund before they reached retirement age, they had only a small amount of money in the social security accounts at their disposal. The government investment therefore acted as a life raft for this group of retired residents.
Leong questioned why the MOP3.4 billion allocated to the Macao Foundation, which is left over from the MOP10 billion anti-Covid financial support programs, cannot be used to support the government investment in social security instead.
Leong’s colleague and association coworker Ella Lei, also directly elected, asked a similar question and made a similar suggestion as Leong.
Directly-elected Becky Song and new face in parliament Ron Lam also raised questions about the absence of the MOP7,000 investment. Lam calculated that the investment would only cost the government MOP532 million in total. “I don’t think we’re lacking this money, but it will help a lot of those needing it,” he said.
José Pereira Coutinho, also directly elected, raised questions on the topic. He said that many senior residents have reached out and urged him to call on the government to resume the policy.
On other topics, indirectly-elected lawmaker Ip Sio Kai, Pereira Coutinho and Song each asked about land auctions. Currently, all land is offered as concessions to developers or users who are in some way understood as renting the plots of land. Ip asked when and where the auctions will take place.
Ip also asked about the issuance of public bonds when the city is facing three years of deficit. Although the city’s reserves are still reliable, with several hundred billion available to the city, the issuance of bonds could help raise more income for the government and simultaneously develop the city’s ability to operate a securities market.
Pereira Coutinho asked Lei to disclose progress in two areas: government loans to the public as financial support and the government’s investments in Guangdong province. He was also not happy that the government had commissioned a large number of research and consultation projects, from which little to none of the results had been released to the public. “Not even we, legislators, had access to the results,” Pereira Coutinho said.
He also asked Lei how the government could further cut spending, especially that which is unnecessary.
Song also stated that tax waivers for businesses are unreasonable, because they are earning money from the city but are not required to contribute to public income.
Several lawmakers also called for another round of consumption subsidies next year.
In response to the lawmakers’ questions, the senior official first stated that he would not answer policy-oriented questions because the parliamentary session was set to focus on the budget itself.
He then explained that, due to the lack of monetary policy in Macau, the government does not have significant means to boost the economy other than expanding investment. As such, and following its practice in the last couple of years, the government has decided to retain a relatively large scale public investment in construction works.
With regard to the development of the financial sector in Macau, Lei first stressed the potential of the Guangdong-Macao Intensive Cooperation Zone in Hengqin, and said that it will bring greater opportunities to the city.
Emphasizing culture and tourism as Macau’s basic trade, the senior official explained that the city’s financial sector has expanded 19-fold over the past 21 years. He also revealed that the government is drafting a Trust Law which will enable the government to gradually build a trust platform to further develop the city’s financial industry.
In answer to the questions about general welfare and that of the elderly, Lei stressed that the budget proposed spending MOP23 billion on general welfare, of which MOP6.4 billion goes to welfare for the elderly.
Lei stressed that the government would never let the elderly down, because they helped to build Macau into what it is right now. “They have made contributions to the city when they were younger, so we must take better care of them,” the senior official said.
He then reiterated that it is the law which forbids the investment of the MOP7,000 amount into the Central Provident Fund.

MOP30.34b deficit in 2022 budget
For the third year in a row, the budget presented by the government forecasts a deficit — this year amounting to MOP30.34 billion.
In his presentation, Lei reiterated that the financial target next year is to reduce spending and retain income, thus achieving a healthy financial constitution.
Despite the waiver of a series of taxes — including business tax, performance ticket stamp tax and tourism tax for restaurants — Lei stressed that a wide array of social welfare programs would be retained.
Two new waivers have been proposed in the budget for next year: an Investment Fund Supervision Fee and a Mainland Floods Donation. The former is proposed to help promote development in wealth management; the latter is to encourage charitable donations, and is only applicable to taxpayers in Income Supplementary Tax or Group 2 – Professional Tax.
The retained welfare programs include the cash handout, which will remain at MOP10,000 per eligible permanent resident and MOP6,000 per non-permanent resident. In addition, there will be the health voucher of MOP600 per eligible resident, electricity and water bill subsidies, the life education subsidy, and elderly and physical disadvantage subsidies, among other welfare plans.
Meanwhile, the salary point for civil servants will remain at MOP91.
The budget for next year was passed in general terms yesterday. It will be discussed at a competent parliamentary committee before its clauses are discussed and voted on at the plenary.

Other topics on the agenda
Yesterday, the parliament also discussed the execution of the budget of 2020 and the audit report on the public accounts for 2020. Both bills passed unanimously in general terms with few questions from lawmakers.
A bill that proposes cancellation of the presentation of the vehicle circulation tax certificate, which is the receipt with a circle required to be shown on all vehicles except public buses, as well as the addition of payment of the tax via the government app, was introduced to the parliament yesterday.
Lawmakers Ella Lei and Ron Lam asked if the absence of the receipt would obstruct the work of law enforcement officers in identifying which vehicles’ tax has been paid and which has not.
A representative from the Public Security Police Force’s Transport Department assured lawmakers that their work will be unaffected if the bill is enacted as law. The proposed date for enactment is January 1, 2022.
Becky Song asked if the government has plans to digitize all documents that must be stored in a vehicle driven on public streets.
Secretary for Administration and Justice André Cheong revealed that the government is developing an upgrade to its app. When the upgrade is complete, the digitization of these documents will be included.
Another bill that proposed a change of presentation of the Official Gazette was also presented. When passed, the publication will only appear in a digital format. Physical documents will only be printed when necessary, such as when the printing machine is down on a date of issuance.
Lam questioned whether there is a chance that the government database could be hacked and the Official Gazette altered.
Both bills were passed in general terms by the plenary unanimously.