Secretary for Economy and Finance Lionel Leong Vai Tac said Tuesday the government would have to cut its expenditure if the city’s average gross gaming revenue drops to 18 billion patacas a month.
The policy secretary made the remark after attending an annual seminar hosted by the Macau Chamber of Commerce (ACM) in Nape.
Leong was a speaker at the seminar, which was attended by over 100 representatives from various business sectors, who discussed the current economic situation.
Meanwhile, the legislature’s 2nd Standing Committee President Chan Chak Mo Tuesday quoted Leong as saying that the government had come up with plans to cut back its spending if the average gross gaming revenue dips to 17-18 billion patacas a month.
Earlier this month lawmakers passed the outline of the government’s amendment budget bill for 2015, according to which the government expects total receipts of 119.9 billion patacas this year, based on an expected average gross gaming revenue of 20 billion patacas a month, a 22.4 percent decrease from its original estimate presented to the legislature late last year.
The legislature had approved the original 2015 budget bill in December. The government said later that as gaming tax payments, the main source of its income, had suffered consecutive decreases since the middle of last year which were more severe than what was previously expected, it needed to amend its original budget.
Asked by reporters about his remarks at the committee’s closed-door meeting, Leong said that as the policy secretary for economy and finance it was his duty to come up with retrenchment plans if “anything” happens to the local gaming industry.
“If the average monthly gross gaming revenue stands at a stable 20 billion patacas this year the government will have a fiscal surplus of about 10 billion patacas…but if it just drops to about 18 billion patacas [a month], and that is almost a warning …then the government has to balance its expenditure and receipts,” Leong said.
The policy secretary, who was a businessman before taking up his post as one of the government’s five policy secretaries last December, said that the government must therefore prepare plans on how to cut back on spending, while pledging that certain segments of public expenditure such as social welfare and public servants’ salaries would remain unaffected by the retrenchment.
He also said that if the government decided to implement retrenchment policies all public entities would possibly need to freeze their spending by a certain percentage, adding that the government would also consider reclaiming autonomous public entities’ budget surpluses if it needed to go ahead with the cutbacks.
The Macau Foundation (FM) and the University of Macau (UM) are among the government’s various autonomous public entities.
However, he was quick to add that he was unable to give a definite percentage and it would be decided in line with the real situation at that time.
Leong also said that even though April’s gaming gross receipts were expected to be around 18.5 billion patacas, the government saw no need to retrench its spending right away.
Addressing the seminar, Leong also said he had confidence in Macau’s development although severe challenges lay ahead.