Lionel Leong Vai Tac, Secretary for Economy and Finance, made a media statement April 29, 2015 stating government spending cuts may be required if gross gaming revenue continues to fall. Mr. Leong has set the bar at 18 billion MOP for each month. If revenue drops below that amount the city of Macau will need to reduce spending. The city’s revenue is dependent on taxes from gaming, with an effective rate of 39% of the gross revenue made in casinos. Already the government submitted a revised 2015 budget to the Legislative Assembly based on November numbers.

Mr. Leong stated Macau expects to have a surplus of 10 billion MOP with the amended budget cuts. However, he did warn if the gaming revenue falls below the target 18 billion MOP then the budget will turn into a deficit. The expected monthly earnings are 20 billion MOP.

In recent years there has been a 32.9% decline year on year when examining the first quarter of 2015 against previous years. In February 19.5 billion MOP was recorded as the gaming revenue, which is the first time in four years the monthly revenue was below MOP 20 billion.

Mr. Leong wants the government to be prepared for potential decreases for the rest of the year to avoid a deficit. Budget cut-backs would affect public entities like the University of Macau and Macao Foundation. It is still too early to make a decision, Mr. Leong said, but one must be prepared to make changes based on incoming data.

Related Posts

Leave a Reply

Your email address will not be published.