Macau government tightens its belt after 15th consecutive month of falling casino revenues
Government implements budget controls after 15th consecutive month of falling revenues
After years of miraculous growth, collapsing casino revenues have prompted the free-spending Macau government to put the reins on public expenditure in a push to save about 1.4 billion patacas by the end of the year.
As it emerged that casino revenues for last month were down 35.5 per cent on the same period last year, the Office of the Macau Secretariat for Economy and Finance told departments to hold back part of their budgets.
The government said the measures would not affect the population's welfare or this year's cash-sharing scheme, under which residents receive annual government handouts.
Macau-based economist Albano Martins criticised the move. "They are acting on fear and are doing the opposite of what they should do," he said. "At a moment of recession, the government should inject more money into the economy instead of pulling it out."
The former Portuguese colony posted gross gaming revenue of 18.62 billion patacas last month, which amounted to a 35.5 per cent drop compared to August last year. It was the 15th consecutive month of falls.
In the first eight months of the year, Macau accumulated gross gaming revenue of 158.88 billion patacas - 36.5 per cent lower than in the same period last year.
Government departments are now being urged to freeze five per cent of their budgets allocated for "goods and services" and 10 per cent marked for "investment".
Total savings are expected to amount to 1.4 billion patacas for the year.
"It's not the right moment to take such measures, as the situation is still comfortable," Martins said. "The government should be more efficient in managing public money, but not reduce investment or consumption."
The economist said the government should not be too concerned about dropping revenue, since it did not amount to a public debt or deficit.
All departments were asked to spend less on official visits, non-essential refurbishment, promotions, gatherings and souvenirs.
Political commentator Larry So Man-yum said the announcement was no surprise. "The government had said it would take measures if revenue didn't reach a certain level," he said. "There's no good moment for a government to take cut-off measures."
The city's gaming-led economy has been hit hard by Beijing's crackdown on corruption and conspicuous consumption. The government said its finances were stable and it had the resources to respond to any unexpected economic fluctuations.
"The measures won't affect expenses on the population's welfare, namely those regarding this year's cash-sharing scheme," a statement said. All permanent residents will receive a 9,000 pataca handout; non-permanent residents get 5,400 patacas.
So was not as optimistic about the economic future as he had been, but did not expect an unemployment problem.
Several new integrated resorts - in which gaming is secondary - are to open as part of a push to diversify the economy.