Billions to spend

The decline in gaming revenues has switched the government’s mentality to saving mode and for the first nine months of 2015 public expenditure amounted to MOP51.09 billion (US$6.40 billion).
This means that only 58.1 per cent of the total expenditure projected for the whole year – MOP87.92 billion – has been used and that from October to December, the Executive has MOP36.83 billion to spend.
According to Central Account data, released by the Financial Services Bureau on Friday (DSF), from January to September public expenditure increased 25.2 per cent in comparison to the same period of 2014, when the costs of the government totalled MOP40.81 billion.
For the same period, current expenditure increased 24.5 per cent to MOP47.81 billion from MOP38.39 billion. At the same time, the investment of the government increased 48.2 per cent to MOP2.55 billion from MOP1.72 billion. The increase in investment was mainly driven by the growth of the Investment Plan (PIDDA), which jumped 49.3 per cent to MOP2.49 billion from MOP1.67 billion.
The expenditure is in line with the promise of the Chief Executive, Fernando Chui Sai On, to increase spending on social policies during his second term. According to DSF data, the amount of expenditure transferred to the Social Security Fund from January to September this year was MOP13.14 billion, while for the same period of last year it stood at MOP7.03 billion.
Revenues reflecting ‘new normal’
As at September, the revenue of the central account dropped 32.2 per cent year-on-year, to MOP82.05 billion from MOP121 billion, which is a decrease of approximately MOP39 billion.
If on the one hand public expenditure seems to be under control by the Executive the control of revenues is trickier. With three-quarters of the year gone, the government has taken in 76.9 per cent of the projected MOP106.73 billion for the whole year.
This decrease in revenue has mainly resulted from the cut in income from direct taxes, which went down 33.7 per cent to MOP69.96 billion from MOP105.52 billion. This trend reflects the decrease of gaming revenues in the territory, as direct taxes from gaming alone decreased 35.5 per cent to MOP65.25 billion from MOP101.13 billion.
By contrast, direct taxes from other activities increased 7.3 per cent to MOP4.71 billion from MOP4.39 billion. However, it ‘only’ accounts for 68.9 per cent of the income projected for the whole year, which is forecast to be MOP6.85 billion by the end of December.