Macau’s Chief Executive, Fernando Chui Sai On (pictured), on Wednesday said that the city’s public finances remain sound despite an ongoing slump in casino gross gaming revenue (GGR). The territory’s top official also stressed that some austerity measures announced on Tuesday would not affect spending on social welfare.
The Macau government on Tuesday said it would rein in public expenditure in a push to save about MOP1.4 billion (US$175.4 million) in the current fiscal year, as gaming revenue in the city keeps falling.
Casino GGR for August fell by 35.5 percent year-on-year to MOP18.62 billion, according to data released on Tuesday by Macau’s gaming regulator. Accumulated GGR for the calendar year to August 31 now stands at MOP158.88 billion, a fall of 36.5 percent on the same period in 2014.
In his Wednesday comments, Mr Chui said the government’s social policies would not be negatively affected, Radio Macau reported. He additionally said the measures would not affect the cash-sharing scheme under which residents receive annual government handouts of money.
Mr Chui said the government would again consider sharing the fruits of the city’s economic development with Macau residents depending on this year’s fiscal surplus.
“I am optimistic. If we record a surplus at the end of this year, we will keep the cash-sharing scheme,” the Chief Executive reportedly said.
The Macau government’s fiscal surplus was down 59.1 percent year-on-year in the first seven months of 2015 to MOP27.2 billion, as its take from direct taxes on gaming dropped 35.7 percent year-on-year in the same period.
The cash handout scheme cost about MOP5.65 billion in 2014, according to government’s estimates. Last year, more than 590,000 permanent residents each received MOP9,000 and over 61,000 non-permanent residents each received MOP5,400.
According to a statement on Tuesday, Macau government departments have been told to freeze 5 percent of their budgets allocated for consumption and 10 percent marked for investment. All departments were also asked to spend less on official visits, non-essential refurbishment, research projects, promotions, gatherings and souvenirs.
On Wednesday, Mr Chui stated that the government’s finances remain stable and with enough resources to respond to any unexpected economic fluctuation.
The announcement of the government spending cuts comes on the heels of official data showing that Macau’s gross domestic product for this year’s second quarter was down 26.4 percent year-on-year.
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”We expect Goa to quickly become a US$1 billion market as it transitions to land-based casinos (from US$150 million today), which is still just a fraction of India’s total GGR potential of US$10 billion to US$17 billion”
Analyst at Union Gaming Securities Asia