Key points:
- Monthly gaming revenue below MOP15bn (US$1.86bn) may trigger deficit.
- Government recurrent spending forecast at MOP115bn.
- Heavy reliance on casino tax heightens financial vulnerability.
Macau Chief Executive Sam Hou Fai has cautioned that a drop in monthly gaming tax revenue below MOP15bn could lead to a fiscal deficit, underlining the urgent need to reconsider the city’s tax structure.
Speaking during a policy address, Hou Fai noted that the current financial model is overly dependent on gaming-related income, with projected casino tax contributing more than 80% of this year’s revenue. Of the MOP115bn in estimated recurrent expenditure, MOP93.1bn is expected to be drawn from gaming taxes.
Public sector wages, totalling MOP30bn, along with increasing social welfare costs, were identified as areas of mounting pressure. Mr Sam warned that if gaming income were to fall towards MOP12 to 15bn per month, the government would struggle to meet its fixed obligations.
The Chief Executive reiterated his administration’s commitment to economic diversification. He mentioned efforts to foster development in healthcare and high technology in partnership with Hengqin, alongside proposals to revive legislation similar to the former offshore fund law in order to attract international financial institutions.
When questioned by legislator José Maria Pereira Coutinho on whether consumer vouchers might be issued again to stimulate demand, Mr Sam responded that such measures were suited to a different economic climate and would require careful assessment.
He also stated that any review of frontline civil servant salaries must strike a balance between public sector conditions and wider fiscal sustainability.
