The government is committed to creating a “soft environment” for local small- and medium-sized enterprises (SMEs) by optimizing the legal framework, reviewing policies, and enhancing tax incentives.
Chief Executive Sam Hou Fai referred to a “soft environment” as the non-physical or intangible aspects of the business climate that make it easier and more attractive for local SMEs to operate and thrive.
Sam stated yesterday during the Q&A session at the Legislative Assembly (AL) that an effective market and an effective government complement each other in economic development, serving as key factors in promoting balanced social and economic growth.
“Efficient markets play a crucial role in the governance of society as a whole. They involve not only the government but also the overall functioning of society, particularly within our traditional system of governance […] Fundamentally, an efficient market is a mechanism where resource allocation plays a decisive role,” said Sam.
The Chief Executive emphasized that the government would foster a favorable environment by optimizing the legal framework and reviewing policies and tax incentives to support effective market operations.
“From the government’s perspective, in the medium to long term, particularly in the context of Macau, we cannot merely borrow elements from other markets to create an effective market. Therefore, we must tailor the existing system to fit Macau’s actual situation […] From the standpoint of public services, we have a clear understanding of the investment environment and market operations,” he added.
Reaffirming that the government’s primary task is to create a business model suitable for market goods within a supportive environment, Sam noted that the government will ensure market participants can operate legally without licenses by optimizing effectiveness.
This includes conducting a comprehensive policy review on an integrated platform, refining the quasi-licensing system, and establishing a dedicated working group to amend relevant laws and regulations.
This aims to simplify the approval process and enhance market operation efficiency while maintaining effective regulation, according to him.
Concurrently, Sam stated, SME operators must also make corresponding commitments, which the government will subsequently monitor.
Sam also urged SMEs to undergo digital transformation to enhance their market competitiveness, collaboratively creating a favorable market environment to gain greater development opportunities and living conditions.
In this regard, according to Sam, the “2025 SME Digitalisation Support Services” program will be expanded to 1,500 places, and the government will continue to promote relevant support measures to ensure that policies are precise and effective, responding positively to community needs.
In addition, the government will continue its stamp duty reduction policy this year.
In the meantime, Sam highlighted that “Macau’s fiscal structure is unbalanced,” with a narrow tax base posing a challenge. He warned that if gaming tax revenue falls below 15 billion patacas per month, “there is a risk of a fiscal deficit.”
ëGovít serves societyí
The new government has so far established six leadership and working groups, with Sam noting that the coordination mechanism will allow for a problem-oriented approach to address issues both vertically and horizontally.
“The operation of the government is a very complex machine and system,” Sam said, noting that the number of civil servants in Macau, including teachers in tertiary education institutes, amounts to nearly 36,000 and is spread across various fields and industries, involving all aspects of society.
“If the government is efficient, well-coordinated, and the whole machine is operating as a whole, I believe its effectiveness will be reflected in its true service to society,” he added.
He emphasized that civil servants are responsible for providing public services, saying: “The government serves society, not leads it.”
In response to society’s “high” expectations, the six leadership and working groups are set up to enhance governance effectiveness and meet social needs, with the city’s top official overseeing public administration reform.
Sam pointed out: “Currently, we have 71 bureaus and departments, with the number of civil servants in Macau exceeding 35,600, which is a huge scale […] Given this context, we advocate for necessary adjustments to the existing 40-odd departments. It must be clear that the functions of these departments need to be re-examined and integrated; otherwise, it will be difficult to play an actual role.”
Citing the 2025 budget proposal passed in November last year, Sam noted that the total expenditure on civil servants reached 30.26 billion patacas.
In response to lawmaker José Pereira Coutinho’s concern regarding the potential adjustment of salaries for junior frontline civil servants, Sam admitted that “many residents have opinions about the salaries and benefits of civil servants.”
He highlighted the importance of balancing the treatment of civil servants with fairness in society as a whole.
According to Sam, going forward, the government will clarify the direction of non-gaming investment and establish an internal coordination group to address this work, including determining standards and reviewing and evaluating non-gaming investment, which will fall under the Secretary for Economy and Finance’s portfolio.
Rigid expenditures
Macau’s government expenditures on education, medical and health care, social security, and community services exceed 42 billion patacas, accounting for half of the rigid expenditures.
“We are duty-bound to care for the entire society in terms of education, healthcare, and people’s livelihood,” said Sam.
He emphasized that while the budget may be adjusted, a raft of social security measures will be increased as much as possible under the current circumstances, “adhering to a pragmatic approach, doing what we can, and doing our best.”
Sam affirmed the development of education in Macau, highlighting both basic and higher education, particularly in the Asia-Pacific region. He noted that this year’s education expenditure reached 14 billion patacas, benefiting 90,000 to 100,000 primary and secondary school students, resulting in a high coverage rate and underscoring the significant role of education in rigid expenditures, “reflecting Macau’s great emphasis on education.”
Noting that the education budget has increased more than tenfold since 1999, Sam emphasized that education is “the foundation of the development of ourselves,” and therefore, education policies, particularly free education, must be promoted without wavering.
He stated: “We will not take a step backwards, unless there are extreme circumstances that are untenable.”
In line with his commitment, Sam noted that the government will continue to increase investment in education, support financial measures for disadvantaged schools, and optimize basic education and school layout to enhance the stability and adaptability of the education system.
“Overall, we will stabilize class sizes through a flexible free education mechanism and continue to review and analyze class data for each school, allowing each school to coordinate and manage on its own. Such efforts will ensure the effective allocation of educational resources and promote the all-round development of students,” he added.
Sam emphasized the importance of safeguarding the fundamental right to autonomous learning, stating that the government should not intervene in this regard.
According to him, the government’s main role is to provide educational resources, along with guidance and coordination. He added that the government has implemented several measures to support and improve underperforming schools to help enhance the quality of education. Additionally, the government will provide appropriate funding for teachers through the Education Fund to ensure the effective use of educational resources. These measures aim to promote the overall development of education and enhance students’ learning experience.
In light of evolving technology, Sam acknowledged that the government must focus on comprehensive planning for education, technology, and talent cultivation to address social development needs.
Noting that 23 schools are currently participating in “smart education” this academic year, he stated that the next step will involve the Education and Youth Development Bureau (DSEDJ) coordinating with each school to address technological changes.
This includes enhancing teacher training to advance science and technology education.
The government introduced a new “childcare allowance” plan for local permanent residents, providing a monthly allowance of 1,500 patacas exclusively for children under the age of three.
Sam stressed that this scope was established in response to Macau’s policy of providing tuition-free education from the age of three, stating that “this arrangement is intended to better support families and the development of early education.”
Sam expects that in 2025, over 15,000 infants and young children will benefit from the childcare allowance, with a budget of 270 million patacas, representing a significant portion of the government’s increased budget.
The birth allowance has also risen to 6,500 patacas, an increase of more than 20%.
Regarding welfare for senior citizens among other disadvantaged groups, Sam noted that there are currently 140,000 pensioners, with 100,000 being full recipients over the age of 65. He anticipates that the government’s annual financial expenditure will increase by 400 to 500 million patacas; if 50,000 new recipients are added within five years, related expenditures could surge by several billion patacas.
It is noted that approximately 109,200 local residents are over the age of 65 this year, accounting for 18.4% of the local population. By 2041, this figure is estimated to rise to about 164,000, making up 24.8% of the population.
With the aging of the local population, Sam said he expects the relevant base figure to increase rapidly in the coming years.
In this context, he mentioned that efforts are underway to link the pension base figure to the minimum subsistence index.
Yesterday’s Q&A session extended for over three hours, with 31 members of the legislature registered to pose questions.
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