2021 budget deemed ‘over optimistic’

The Legislative Assembly (AL) has approved the 2021 budget, which will allocate 26.6 billion patacas from the financial reserve to address the public administration deficit.
However, lawmakers raised several concerns during the recent AL plenary meeting.
Lawmaker Ip Sio Ka has dubbed the SAR government’s 2021 budget “over-optimistic,” in remarks made by the lawmaker during the meeting on Friday.
During the session, the Secretary for Economy and Finance Lei Wai Nong presented to the lawmakers the Macau SAR government’s 2021 budget, according to which the gross gaming revenue for next year is expected to be 130 billion patacas, an amount equivalent to 44.45% of that of 2019. Last year’s GGR stood at 292.46 billion patacas.
After deeming the budget over-optimistic, Ip questioned, according to the current situation of gambling customers and the uncertainty of immigration policies, how many visitors Macau needs in order to reach the government’s expected GGR of 130 billion patacas.
Ip also commented that he has not seen any emerging industry promising to increase government revenue.
Unlike Ip, lawmaker and gaming expert Fong Ka Chio thinks the government’s GGR forecast is appropriate.
Fong estimated that Macau will record a total of over 60 billion patacas in GGR in 2020. For the government to expect next year’s GGR to be double that of this year, Fong believes it is “absolutely not pessimistic.” He continued by observing that 130 billion patacas only represents approximately 40% of that of 2019, which is appropriate.
Fong’s analysis was that casinos’ mass market is gradually growing and SMEs’ recovery is also stronger.
Responding to the lawmakers’ comments, Lei reiterated that the government is “very prudent” in estimating next year’s gross gaming revenue.
Starting from September 23, residents from mainland China have been able to obtain travel permits for Macau. After the past National Day Holiday, Macau has been recording 220 million patacas’ gaming revenue on a daily basis.
The government expects this number to rise to 350 million patacas on a daily basis in 2021, which would in turn make the GGR for the entire 2021 stand at 130 billion patacas.
The Secretary commented that to cover public expenditure for both the 2020 and 2021, the SAR government plans to allocate one fifth of the excess reserves towards the deficit.
According to Lei, combining the money used for the previous two rounds of Covid-19 pandemic relief with 26.5 billion patacas of the expected deficit of next year, the amount tallies up to 78.6 billion patacas, which is 18% of the 440 billion excess reserve.
Lei remarked that the development of the pandemic is beyond the government’s evaluation and that the SAR government must be prepared for the worst. He stated that the excess reserves must be ready for a long road in the future.
“Life-time savings are designated for protecting employment, protecting livelihoods and for protecting the economy,” Lei commented.
According to Lei, domestic demand currently accounts for 66% of Macau’s GDP. In October, the number of visitors to Macau was about 603,000. In Lei’s opinion, although the number did not meet the expectations, the government is still seeing a turnaround in Macau’s tourism industry and the city’s service exports have been gradually restored.
Lei hopes that travel between Hong Kong and Macau will be able to resume in the second or third quarter of next year if the pandemic is under control.